Moody's might downgrade American Capital

Moody's Investors Service said it placed American Capital, Ltd.'s B2 corporate family rating and B2 senior unsecured bonds under review for downgrade due to the increased potential the company will undertake a pre-packaged Chapter 11 bankruptcy restructuring.

The review follows the company's announcement of the current status and extension of its exchange offer for substantially all of its unsecured debt. The consummation of the offer requires 85% of the public unsecured holders and 100% of private unsecured holders to tender. The agency said that most classes of the private secured notes tendered at a rate of 90% to 100%, but only 7% of the public unsecured noteholders have tendered for exchange.

The review will focus on the company's ability to successfully complete its debt exchange. Moody's said that in the event of bankruptcy, the company would likely be downgraded one to two notches given the agency's belief that the recovery for bondholders would be high due to the company's substantial equity base.

© 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.