S&P lowers Virgin Australia to D

S&P said it downgraded Virgin Australia Holdings Ltd. to D from CC and its unsecured debt ratings to D from C.

The downgrade reflects the moratorium on all creditor payments while the airline is under administration, S&P said. Virgin will not be making the May 15 payment on its $425 million of unsecured senior notes.

“We consider the payment moratorium to represent a default under our criteria. During the administration process, the company will explore options to recapitalize the business, or otherwise, realize value from the company's asset base to maximize returns to creditors. We expect that unsecured lenders will be forced to accept less value for amounts owing under the terms of the existing unsecured debt facilities as part of the anticipated debt restructuring and recapitalization process,” S&P said in a press release.

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