S&P lowers CNG to SD, notes to D

S&P said it lowered its issuer credit ratings on CNG Holdings Inc. to SD (selective default) from B-.

At the same time, the agency downgraded its issue ratings on the company's senior secured notes to D from B- and revised the recovery rating to 5 from 4. The 5 recovery rating indicates an expectation for modest (10%-30%; lower half of the range) recovery in the event of a payment default.

"The rating action follows the company's debt repurchase at prices that we believe were executed substantially below par," S&P credit analyst Shakir Taylor said in a news release.

On July 29, the company entered into a new first priority credit facility, which consisted of a $25 million revolving credit facility and $100 million term loan. While the term loan may be used for general purposes, including the funding of new receivables, a portion of the proceeds from the term loan were used to repurchase $68.9 million of the company's 9 3/8% senior secured notes due May 2020.

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