S&P cuts Atalian

S&P said it lowered its ratings on La Financiere Atalian SAS and its senior unsecured notes to CC from CCC. The 4 recovery rating on the notes is unchanged.

On Jan. 19, the company announced a planned debt restructuring for its upcoming debt maturities, which given its terms, the agency said it considers a distressed exchange because the compensation is less than what lenders were originally promised.

If Atalian completes the offer or a conventional nonpayment of interest or principal occurs, S&P said it would treat it as a general default and lower the ratings on Atalian and its debt to D.

“Following such a default, we would review Atalian's new capital structure, cash flow, liquidity position, and business risk, and then reassess our ratings on Atalian and the new senior secured notes. We note that the proposed transaction would result in a significant reduction in debt and a notable reduction in cash interest costs for Atalian.

The outlook is negative.

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