...Recovery Estimates Determine Ratings: Fitch Ratings' instrument ratings for issuers rated `B+' and lower include the results of an issuer-specific enterprise valuation (EV). The EV is a key driver of debt issue Recovery Rating (RR) estimates. Instrument ratings are notched up or down from the Issuer Default Rating (IDR) according to the results of Fitch's RR analysis. RR Drivers: In the recurring Road to Recovery Ratings (RtR) report series, Fitch deconstructs its EV analyses by separating the key input assumptions: a going-concern (GC) EBITDA estimate and an EV multiple for a hypothetical reorganization scenario. Fitch analyzes the effects of capital structure and leverage on RRs for the debt instruments of 211 U.S. issuers. Higher First-Lien Leverage: Median first-lien leverage ratios increased to 4.1x for 206 capital structure analyses in this edition of RtR compared to 3.8x for 168 issuers in the April 2014 edition. The uptick led to a drop in the percentage of first-lien issues assigned...
