Moodys.com
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

 

By clicking “I AGREE”, you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s information that becomes accessible to you (the “Information”). References herein to “Moody’s” include Moody’s Corporation. and each of its subsidiaries and affiliates..

 

Terms of One-Time Website Use

 

1.             Unless you have entered into an express written contract with www.moodys.com to the contrary and/or agreed to the Terms of Use at www.moodys.com or ratings.moodys.com, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.                   

 

2.             CREDIT RATINGS AND MOODY’S MATERIALS FOUND ON WWW.MOODYS.COM OR SITES OTHER THAN RATINGS.MOODYS.COM MAY NOT BE DISPLAYED IN REAL TIME. FOR REAL-TIME DISPLAYS OF CREDIT RATINGS AND OTHER INFORMATION REQUIRED TO BE DISCLOSED BY MIS PURSUANT TO APPLICABLE LAW OR REGULATION, PLEASE USE RATINGS.MOODYS.COM.           

 

3.             You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities. Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision. No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.

 

4.             To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.     

 

5.             You agree to read and be bound by the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.​​​

 

6.             You agree that any disputes relating to this agreement or your use of the Information, whether in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Moody's assigns B2 CFR to Carlson Travel, Inc.; outlook negative

05 Dec 2016

London, 05 December 2016 -- Moody's Investors Service ("Moody's") has today assigned a B2 corporate family rating (CFR) and B2-PD probability of default rating (PDR) to Carlson Travel, Inc., the indirect parent of Carlson Wagonlit B.V. (CWT). Moody's has also assigned a provisional (P)B2 rating to the proposed USD750 million (equivalent) of dollar-denominated fixed rate senior secured notes and euro-denominated floating rate senior secured notes due 2023, and a provisional (P)Caa1 rating to the USD275 million senior unsecured notes due 2024, to be issued by Carlson Travel, Inc. (CTI or the company). Concurrently, Moody's has withdrawn Carlson Travel Holdings, Inc.'s B2 CFR and B2-PD PDR. The outlook on all ratings is negative.

The rating action follows the announcement on 5 December 2016 that the company proposes to refinance the existing facilities of the group, currently issued by CWT and Carlson Travel Holdings, Inc. Proceeds from the transaction in addition to USD150 million equity injection from shareholder Carlson, Inc. (unrated), will be used to (1) refinance existing indebtedness; (2) pay fees and expenses; and (3) repay certain shareholder loans.

Moody's has affirmed the B1 ratings on the existing USD415 million and EUR300 million senior secured notes due 2019 issued by Carlson Wagonlit B.V., the Caa1 rating on the existing USD360 million PIK Toggle notes due 2019 issued by Carlson Travel Holdings Inc. and the Ba2 rating on the existing USD100 million super senior Revolving Credit Facility (RCF). The ratings on the existing instruments will be withdrawn on confirmation of the transaction and repayment of the existing debt.

The ratings on the new instruments have been assigned on the basis of Moody's expectations that the transaction will close as expected. Moody's issues provisional ratings in advance of the final sale of securities and these ratings reflect Moody's preliminary credit opinion regarding the transaction only. Upon a conclusive review of the final documentation, Moody's will endeavour to assign definitive ratings to the senior secured notes and senior unsecured notes. Definitive ratings may differ from provisional ratings.

Today's rating action reflects the following drivers:

-- The USD150 million equity injection into CTI will be used to refinancing existing facilities and will result in a reduction in Moody's adjusted leverage of approximately 0.4x, although Moody's expects leverage to remain high at approximately 5.5x on a pro forma basis at year-end 31 December 2016 (FY2016).

-- Weak operating performance and Moody's expectation that the environment for business travel is likely to remain challenging and consequently Moody's expects leverage to remain high over the next two years.

--Significant capital investment to grow the company's online platform and hotel offering will enhance the group's business profile but result in negative free cash flow over the next 12-18 months.

RATINGS RATIONALE

The B2 CFR reflects: (1) high financial leverage that Moody's forecasts to be approximately 5.5x as at FY2016, even though the equity injection from the sponsor will result in a reduction in leverage of approximately 0.4x; (2) Moody's expectation that leverage will remaining high in light of a challenging operating environment for business travel which is expected to persist; (3) negative free cash flow metrics over the next 12-18 months due to additional capital investment to grow the company's online platform and hotel offering; and (4) cyclical nature of the business travel industry and exposure to external shocks. However, the rating also positively reflects; (1) the group's leading market position in the Travel Management Company (TMC) Industry; (2) the company's diversified customer base and high level of client retention at approximately 95% in the 12 months ended 30 September 2016; (3) a strong track record in managing its cost base and; (4) further investment in technology which will improve service offering and enhance the group's business profile.

Moody's views positively the support provided by the owner Carlson, Inc. (unrated), highlighted by the proposed equity injection of USD150 million, used as part of the refinancing transaction which includes the refinancing of existing senior secured notes and repayment of the USD360 million PIK Toggle notes. However Moody's expects leverage to remain high at around 5.5x on a pro forma basis at 31 December 2016 and deleveraging is likely to be limited by a continuation of a challenging operating environment for business travel.

More positively, despite a difficult operating environment the group has demonstrated some capacity to flex its costs base and Moody's expects the company to continue to focus on efficiency improvements in parallel with an increased focus on growing the group's online offering. Nevertheless, significant investment to achieve further efficiency improvements and growth of the online platform is likely to result in negative free cash flow generation over the next 12-18 months.

Moody's expects the company to have an adequate liquidity profile pro forma for the transaction as at 31 December 2016, supported by USD144 million in cash reserves. Liquidity is also supported by a new USD150 million super senior revolving credit facility (RCF, unrated), however, negative cash flow generation is likely to require funding from cash reserves or drawings on the RCF. The recent refinancing transaction will extend the maturity profile of the group, with no significant maturity until 2023 when the senior secured notes are due.

The new USD750 million (equivalent) senior secured fixed rate notes and senior secured floating rate notes issued by Carlson Travel, Inc. are rated (P)B2, in the line with the CFR, reflecting their ranking behind the USD150 million super senior revolving facility but ahead of the USD275 million senior unsecured notes, and also reflecting the relatively weak positioning of the CFR within the B2 category. The (P)Caa1 rating of the new USD275 million senior unsecured notes reflects their structural subordination to all other debt instruments within the capital structure.

Rating outlook

The negative outlook reflects Moody's expectation that operating performance will remain constrained by a challenging environment for business travel over the next 12-18 months, and Moody's expectation that leverage will remain elevated with free cash flows limited by the costs of business transformation. Nonetheless Moody's expects that the company will maintain an adequate liquidity profile and will not make any large debt-financed acquisitions.

Factors that could lead to an upgrade/downgrade

Near-term upward pressure is unlikely given the negative outlook but the outlook could be revised to stable if over the next 12-18 months the company stabilises its trading results whilst reducing leverage on a Moody's adjusted basis sustainably below 5.5x and maintaining an adequate liquidity profile.

Positive rating pressure could build if CTI decreases its Moody's adjusted debt/EBITDA ratio sustainably below 4.5x.

Negative rating pressure could arise should CTI operate with Moody's adjusted debt/EBITDA ratio above 5.5x for a sustained period of time or there is a material weakening of the liquidity profile.

List of affected ratings

Assignments:

..Issuer: Carlson Travel Inc.

....LT Corporate Family Rating, Assigned B2

....Probability of Default Rating, Assigned B2-PD

....Backed Senior Secured Regular Bond/Debenture, Assigned (P)B2 (LGD3)

....Backed Senior Unsecured Regular Bond/Debenture, Assigned (P)Caa1 (LGD6)

Affirmations:

..Issuer: Carlson Travel Holdings, Inc.

....Senior Unsecured Regular Bond/Debenture, Affirmed Caa1

..Issuer: Carlson Wagonlit B.V.

....Backed Senior Secured Regular Bond/Debenture, Affirmed B1

..Issuer: Carlson Wagonlit Travel, Inc.

....Backed Senior Secured Bank Credit Facility, Affirmed Ba2

..Issuer: Carlson Wagonlit UK Limited

....Backed Senior Secured Bank Credit Facility, Affirmed Ba2

Withdrawals:

..Issuer: Carlson Travel Holdings, Inc.

....LT Corporate Family Rating, Withdrawn , previously rated B2

....Probability of Default Rating, Withdrawn , previously rated B2-PD

Outlook Actions:

..Issuer: Carlson Travel Holdings, Inc.

....Outlook, Changed To Negative From Stable

..Issuer: Carlson Travel Inc.

....Outlook, Assigned Negative

..Issuer: Carlson Wagonlit B.V.

....Outlook, Changed To Negative From Stable

..Issuer: Carlson Wagonlit Travel, Inc.

....Outlook, Changed To Negative From Stable

..Issuer: Carlson Wagonlit UK Limited

....Outlook, Changed To Negative From Stable

Principal Methodology

The principal methodology used in these ratings was "Business and Consumer Service Industry" published in October 2016. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

Corporate Profile

Formed in 1997, CWT is a leading global business travel management company, serving corporations of all sizes as well as government institutions around the world. CWT operates in nearly 150 countries and territories worldwide, with around 17,200 employees in its wholly owned operations at the end of September 2016. The company provides the following services: (i) Traveller Services, providing both online and full-service offline travel bookings for corporate and government clients; (ii) Meetings & Events Services, assisting clients to create and manage meetings and events on a cost effective basis; and (iii) Energy, Resources & Marine Services, offering specialised travel services to the Oil & Gas Marine services and maritime and drilling exploration sectors. While the majority of the company's revenue is generated from transaction processing for clients, the services provided by the other business units account for a significant proportion of the value delivered to its clients. CWT also derives around 42% of its revenues from its suppliers.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Martin Hallmark
VP - Senior Credit Officer
Corporate Finance Group
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Richard Etheridge
Associate Managing Director
Corporate Finance Group
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

No Related Data.
© 2022 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND OTHER OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody’s Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $5,000,000. MCO and Moody’s Investors Service also maintain policies and procedures to address the independence of Moody’s Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody’s Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY100,000 to approximately JPY550,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

Moodys.com