S&P trims Range Parent on exchange

S&P said it lowered its ratings for Range Parent Inc. to SD from CCC, its first-lien term loan to D from CCC and its second-lien term loan to D from CC.

Range Parent obtained consent from most of its lenders to exchange its $510 million first-lien term loan and $110 million second-lien term loan for new junior-priority term loans.

“In accordance with the exchange, existing participating lenders of the first-lien term loan will receive new second-, third-, and fourth-out debt facilities on a pro rata basis. Existing participating lenders of the second-lien term loan will receive a new fifth-out debt facility. The proposed financing will also include $95 million of first-out new money to improve the company's ability to work through operations issues.

“In our view, the new junior-priority debt has less favorable terms than those originally promised to all term loan lenders. If lenders agree to these terms, the maturity of its debt facilities will be extended to Feb. 28, 2027, and lenders will have a higher coupon rate than the existing debt facilities,” the agency said in a press release.

S&P added, “Although the proposed exchange will be completed at par and a higher coupon rate, we do not believe these factors provide adequate offsetting compensation for the maturity extension given Range Parent's liquidity profile and elevated leverage.”

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