S&P downgrades Maxcom

S&P said it lowered the issuer credit rating on Maxcom Telecomunicaciones SAB de CV's to CC from CCC, along with the issuer-credit ratings on the company's step-up senior notes due 2020 to CC from CCC.

The recovery rating on the notes is unchanged at 4.

S&P also said it placed the ratings on CreditWatch with negative implications, which reflects the likelihood that the agency will lower Maxcom's rating to D once the company achieves its exchange offer or files for bankruptcy under Ch. 11.

The downgrades follow news that the company did not pay the interest obligations on its step-up senior notes due 2020 due June 18, the agency said.

According to the legal terms of the notes, Maxcom hasn't yet fallen into an event of default because it has a 30-day grace period to cover the past due interest payments, S&P said.

At the same time, Maxcom announced an exchange offer on its current notes, which must be accepted by at least 90% of the shareholders, the agency said.

In the event that the exchange offer isn't resolved within the next 30 days, Maxcom intends to file for bankruptcy, S&P explained.

The agency said it believes the company will maintain ongoing operations with no significant changes, preventing a negative impact on its current clients, suppliers and internal workforce.

© 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.