Moody's downgrades GCX

Moody's Investors Service said it downgraded GCX Ltd.'s corporate family rating and senior secured bond ratings to Caa1 from B3.

The outlook is negative.

This concludes a review for downgrade that began in September, Moody's said.

GCX is a wholly owned subsidiary of Reliance Communications Ltd. through an intermediary holding company, Global Cloud Xchange Ltd.

The downgrade reflects the need to close a definitive refinancing plan to address GCX's $350 million senior secured bond, which is due Aug. 1, 2019, Moody's said.

Although management announced that it is evaluating several refinancing options on its recent earnings call, a binding and definitive agreement is not yet in place, the agency explained.

The company's next interest payment of $12.25 million is due Feb. 1 and the agency said it expects will be satisfied with cash on the balance sheet.

The outlook is negative, reflecting the ongoing uncertainty regarding the refinancing, Moody's said.

S&P lowers DIA

S&P said it lowered the ratings on Distribuidora Internacional de Alimentación SA (DIA) to CCC+ from B and removed them from Credit Watch negative.

The downgrade reflects DIA's very weak liquidity and funding profile with more than €760 million short-term debt due within the next seven months, S&P explained.

The downgrade also considers significant uncertainty and execution risk linked to the group's plans to achieve a sustainable capital structure through a €600 million rights issue and a new long-term bank refinancing agreement of its €1 billion outstanding debt, the agency added.

DIA also faces a very likely breach of its financial covenant at the next testing date in February, S&P said.

The group is in advanced negotiations with banks to secure a refinancing agreement that will address its short-term liquidity needs, the agency noted.

But, S&P said it also understands that in another phase, the group will undertake negotiations to put in place a long-term bank-funded capital structure, including a capital increase.

S&P lowers Southcross Energy

S&P said it lowered Southcross Energy Partners LP's issuer credit rating to CCC-from CCC.

The outlook is negative.

The downgrades reflect the heightened risk that Southcross Energy could be in default of its debt obligations by March 31, 2019, absent a meaningfully favorable change in the partnership's circumstances.

The partnership's more restrictive financial covenant – maximum total debt-to-EBITDA of 5x and senior secured debt-to-EBITDA of 3.5x – will be reinstated, S&P said.

Southcross had a total leverage ratio of 8.6x as of Sept. 30, the agency said.

The partnership currently has about $523 million of total debt outstanding, consisting of $83 million of senior secured revolver borrowings due in August 2019, about $16 million of unsecured notes due November 2019 and a $430 million senior secured term loan due August 2021, S&P said.

The negative outlook reflects a belief that the risk of a default, distressed exchange or other debt restructuring is highly likely by the end of the first quarter of 2019, absent significantly favorable changes in the partnership's circumstances, the agency said.

S&P rates Overseas Shipholding loan B+

S&P said it assigned a B+ rating and 1 recovery rating to Overseas Shipholding Group Inc.'s proposed $325 million senior secured term loan due December 2023, to be issued by OSG Bulk Ships Inc.

The 1 recovery rating indicates 90% to 100% expected default recovery.

The proceeds will be used, along with cash from its balance sheet, to repay its existing $352 million senior secured term loan due 2019.

The company also is seeking to extend the maturity on the ABL by six months to August 2019 and reduce the credit line to $30 million as part of the proposed transaction, S&P said.

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