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Moody’s adds LD to Dawn rating
Moody’s Investors Service said it appended a limited default (/LD) designation to Dawn Acquisitions LLC’s Caa1-PD probability of default rating changing it to Caa1-PD/LD.
On July 21, Dawn disclosed it acquired $85 million in principal of its term loans and then permanently canceled this debt. As disclosed in the company's audited financial statements, during 2021 and 2022 an affiliate of the company's parent bought $132.6 million in principal of Dawn's outstanding term loan debt.
This affiliate contributed $85 million of the total amount of debt it had accumulated through open market purchases to Dawn.
The company accepted the $85 million debt contribution, assumed the debt and subsequently canceled it. The debt repurchases by the affiliate at substantial discounts to par and the $85 million contribution are viewed as a distressed exchange because Moody's said it considers Dawn's capital structure as potentially unsustainable.
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