Top Debt & Credit Rating Agency Actions (CLX, HD, HCA, GCI, ADM, NFX, LUV, AMR)

Today’s reported ratings actions as of just after noon include announcements regarding Clorox Co. (NYSE: CLX), Home Depot, Inc. (NYSE: HD), HCA Inc. (NYSE: HCA), Gannett Co. Inc. (NYSE: GCI), Archer Daniels Midland Co. (NYSE: ADM), Newfield Exploration Co. (NYSE: NFX), AMR Corp. (NYSE: AMR), and Southwest Airlines Co. (NYSE: LUV).

Clorox Co. (NYSE: CLX) has been removed from CreditWatch with negative implications at Standard & Poor’s and Ratings Watch Negative at Fitch Ratings. S&P and Fitch also affirmed ‘BBB+’ ratings on the company’s credit and maintained a stable outlook. Clorox recently beat back an unsolicited offer of $80/share from Carl Icahn, which had pushed the agencies to put negative watches on the company’s credit.

Home Depot, Inc. (NYSE: HD) subsidiary HD Supply Inc. received an upgrade on two senior secured term loans by Moody’s from ‘Baa1’ to ‘A3’. The two loans total $933 million, with $73 million due in 2012 and $870 million due in 2014. The upgrade resulted from a recent upgrade by Moody’s of Home Depot’s senior unsecured rating from ‘Baa1’ to ‘A3’. Because Home Depot guarantees HD Supply’s debt, the loans are treated as if they were made to Home Depot.

HCA Inc. (NYSE: HCA) has received a ‘B3’ rating from Moody’s on up to $500 million in senior unsecured debt due in 2018. HCA filed a preliminary prospectus for the notes with the SEC stating that proceeds from the sale may be used to buy Colorado Health Service’s portion of a joint venture in the Denver area. HCA has already agreed to purchase the stake for $1.45 billion. No interest rate or principal amount has been set for the junk-rated bonds.

Gannett Co. Inc. (NYSE: GCI) received a lowered outlook at S&P from ‘positive’ to ‘stable’. All other ratings were affirmed, including the ‘BB’ rating on corporate credit. S&P noted that the outlook downgrade follows from the agency’s determination that any potential outlook upgrade is more than a year in the future. Because Gannett derives 60% of its revenue from the troubled newspaper business, S&P believes that the company’s prospects for growth are dim.

Archer Daniels Midland Co. (NYSE: ADM) received an ‘A’ rating from S&P on its newly extended $528 million senior unsecured debentures due in 2042. The amount represents privately offered exchanges that were accepted by September 23rd. ADM announced pricing last week on its public debt exchange offer, expiring October 5th. The total amount of debt included in the offer is $1.49 billion.

Newfield Exploration Co. (NYSE: NFX) received ratings from both S&P and Fitch on $500 million in senior unsecured notes due 2022. S&P assigned a rating of ‘BBB-‘ to the notes, which will be senior to the company’s existing senior subordinated notes but junior to all obligations at Newfield subsidiaries. Currently there is no outstanding debt at any Newfield subsidiary. Fitch assigned a ‘BB+’ rating to the notes. Proceeds from the sale of the notes will be used to repay a portion of the company’s outstanding $845 million on its revolving credit facility. S&P maintained a ‘stable’ outlook, while Fitch maintained a ‘positive’ outlook’.

Southwest Airlines Co. (NYSE: LUV) ratings of ‘BBB’ on senior unsecured debt and the company’s overall issuer default ratings were affirmed by Fitch today. The company’s $800 million revolving credit facility  due 2016 also received a ‘BBB’ rating and secured term loans due 2019 and 2020 received ‘BBB+’ ratings. Southwest has no borrowings outstanding against its revolving credit facility.

AMR Corp. (NYSE: AMR), parent of American Airlines, was assigned a rating of ‘Baa3’ by Moody’s on the company’s pass-through certificates which will be used to purchase equipment notes issued by American Airlines to re-finance 43 airplanes, of which 27 are currently financed under other trust certificates and 12 are used as collateral for other third-party loans. The remaining 4 airplanes are unencumbered. The corporate family rating for American is ‘Caa1’ with a negative outlook.

Paul Ausick