Moody's downgrades Delance

Moody's Investors Service said it downgraded Delance Ltd.'s national scale rating to Ba3.ru from Ba2.ru, lowered its $250 million 8¼% senior unsecured bonds due 2010 to Caa3 from Caa1 and assigned a Ca probability-of-default rating to the company. The corporate family rating is unchanged at Caa1.

The outlook was changed to negative from stable.

The downgrade of the bonds was prompted by Delance's recent announcement that it will refinance its outstanding debt, the agency said. The plan includes an offer to exchange each bond for $600 to $800 in cash - to be determined via a Dutch auction - or for $210 in cash and $790 principal amount of new notes.

In Moody's opinion, the successful closing of the exchange offer would constitute a default. Moreover, the agency said it views the probability of a default at the company within the next year to be high, whether the transaction occurs or not.

The outlook is negative in view of the remaining uncertainty regarding the implementation of the proposed debt exchange offer and in view of the limited visibility for Delance's operating performance, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.