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S&P lowers RGL Reservoir
S&P said it lowered the long-term corporate credit rating on RGL Reservoir Management Inc. to SD (selective default) from CCC+.
The agency also said it lowered the ratings on the company’s first-lien senior secured debt to D from CCC and second-lien senior secured debt to D from CCC-.
The 5 recovery rating on the first-lien secured debt is unchanged.
The downgrades follow amendments to RGL’s senior secured debt facilities that materially changed the amount outstanding and the terms of the facility, S&P explained.
As part of the amendments, the first-lien revolver repayment term was extended to 2021 from 2019, amortization payments were added and interest rates increased, the agency said.
As well, the C$140 million second-lien debt was exchanged for C$55 million first-lien debt in addition to common shares and warrants of the company, S&P said.
The transaction is considered a distressed exchange because debt-holders received less than what was promised on the original debt terms, the agency said.
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