Moody’s calls DTEK tender distressed

Moody’s Investors Service said DTEK Energy BV’s recently completed tender offer is a distressed exchange and appended an LD, or limited default, to its Ca probability of default rating.

Through an unmodified Dutch tender offer DTEK Energy said it would repurchase the $82.3 million face value of its senior secured notes at an average buyback price of ca. 60.7%, leading to buyback costs of $50 million.

“The transaction, which followed other tender offers in December 2022 and March 2023, is again intended to re-establish a ‘more stable capital structure’ in light of operational restrictions on the group's export trading,” Moody’s said in a statement.

“Moody's regards the repurchase as a distressed exchange because of the high value in comparison to DTEK Energy's total debt balance and the still very high discount, which may result in an economic loss to lenders,” it explained.

The transaction is not an event of default under the terms of the notes. Moody's said it will remove the /LD designation in three business days.

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