S&P axes Canopy

S&P said it downgraded Canopy Growth Corp.’s issuer rating to SD, selective default, from CC and the rating on its senior secured term loan to D from CC.

On Thursday, the issuer completed the repayment of the first half of its $187.5 million term loan with $750 million of principal outstanding, at a price of $930 per $1,000. The second half of the exchange is expected in April 2023. Canopy also amended certain credit terms including a decrease in the minimum liquidity covenant to $100 million from $200 million.

“Based on S&P Global Ratings' definition of a distressed exchange, we view this transaction as constituting a distressed exchange and tantamount to a default because lenders will be receiving less than originally promised,” the agency said in a press release.

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