Moody's lowers Dixie Electric

Moody's Investors Service said it downgraded Dixie Electric, LLC's probability of default rating to D-PD from C-PD/LD.

The downgrade was prompted by Dixie's filing for reorganization under Ch. 11 with the U.S. Bankruptcy Court in Delaware, Moody's said.

The agency also said it affirmed Dixie's Ca corporate family rating, the Ca (LGD 3) rating on its senior secured bank credit facility and the Ca (LGD 3) rating on its senior secured first-lien revolving credit facility.

The outlook also was changed to stable from negative.

While the five-day grace period on the first-lien term loan due 2020 expired in early September, Dixie and certain lenders entered into a 30-day forbearance agreement, which was subsequently extended, Moody's explained.

On Oct. 26, the company entered into a restructuring support agreement with a group of secured lenders holding more than two-thirds of the secured debt, culminating in bankruptcy filing Nov. 2, the agency said.

The company plans to complete the restructuring and emerge from Ch. 11 before the end of the year, Moody's said.

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