S&P cuts Vallourec

S&P said it downgraded Vallourec to SD from CC after the company missed Tuesday’s principal payment on its revolver after it reached a restructuring pact with its debtholders. The agency considers the missed payment a default.

As part of the agreement, Vallourec will slice its €3.5 billion gross debt, by way of a debt-to-equity swap (about €1.6 billion) and a write-off on the remainder (about €0.2 billion).

“We expect the completion of the agreement with creditors to lead to a healthier capital structure and leverage in the 5x-6x range,” S&P said in a press release.

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