S&P downgrades Horsehead

Standard & Poor’s said it lowered the corporate credit rating on Horsehead Holding Corp. to SD (selective default) from CCC.

The agency also said it affirmed the CCC rating on the company’s senior secured notes. The recovery rating on the notes remains at 4, indicating 30% to 50% expected default recovery.

Horsehead Holding has elected to exercise the 30-day grace period under its indenture agreements with holders of its 3.80% convertible senior notes due 2017, S&P said.

This extends the time period the company has to make a $1.9 million interest payment due Jan. 4 without triggering an event of default under the indentures, the agency said.

The company also entered into temporary forbearance agreements with its lenders related to certain events of default under its Macquarie and Zochem credit facilities while it explores solutions for its liquidity and capital structure issues, S&P said.

Because the agency believes the company’s debt level is unsustainable due to ongoing restructuring discussions, S&P said it does not expect a payment to be made within the grace period.

If Horsehead makes the interest payment within the grace period, the agency said it will likely revise the issuer credit rating to CCC. Otherwise, S&P said it will revise all ratings accordingly.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.