Moody’s downgrades Akorn

Moody’s Investors Service said it downgraded Akorn, Inc.’s probability of default rating to D-PD from Ca-PD.

The downgrade follows Akorn’s May 20, announcement it filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code, Moody’s said.

Moody’s also affirmed Akorn’s other ratings including the Caa3 corporate family rating and Caa3 senior secured term loan rating. There was no change to Akorn’s SGL-4 speculative grade liquidity rating.

The outlook remains stable. “The stable outlook reflects Moody’s view that the current ratings adequately reflect Akorn’s recovery prospects,” the agency said in a press release.

Moody’s plans to withdraw its Akorn ratings.

Fitch downgrades Argentina

Fitch Ratings said it downgraded Argentina’s long-term foreign-currency issuer default rating to restricted default (RD) from C.

Fitch lowered the ratings on the three senior unsecured foreign-currency bonds to D from C and withdrew them for the following reason: bankruptcy of the rated entity, debt restructuring or issue/tranche default.

“The downgrade of Argentina’s rating to RD follows the failure of the authorities to pay interest due on three sovereign bonds within the stipulated 30-day grace period that expired on May 22. This marks an event of default under Fitch’s criteria with respect to the sovereign’s issuer default rating (IDR) as well as the individual issue ratings of the affected securities (global 2021, 2026 and 2046 bonds),” Fitch said in a press release.

S&P cuts four Argentine bonds

S&P said it lowered its ratings on four of Argentina’s U.S. dollar-denominated bonds to D from CC.

“We lowered the issue ratings on three New York-law U.S. dollar-denominated international bonds – Birad 2021, Birad 2026, and Birad 2046 – to D from CC because the government missed $500 million in coupon payments. These payments were originally due April 22, and the grace period expired May 22. These bonds will remain at D pending conclusion of the debt renegotiations that are currently underway,” S&P said in a press release.

The agency also lowered the rating on an Argentine-law U.S. dollar-denominated bond, the Bonar 2024, to D from CC. There were $1.6 billion in coupon and principal payments due May 7.

“These payments were not made, since the bond was captured by government decree 346/2020, dated April 6, that postponed payment of all U.S. dollar-denominated principal and interest on local-law debt to at least 2021, or when deemed feasible by the government,” the agency said.

Moody’s downgrades Equinox

Moody’s Investors Service said it downgraded Equinox Holdings, Inc.’s ratings, including its corporate family rating to Caa2 from Caa1, probability of default rating to Caa2-PD/LD from Caa1-PD and the first-lien bank credit facilities to Caa1 from B3.

Moody’s affirmed the Caa3 rating for the second-lien term loan.

“The downgrade follows Equinox’s amendment to its limited guarantee on the credit facility of affiliate company SoulCycle Inc. (SoulCycle) that will allow Equinox to defer its required repurchases of SoulCycle’s debt to February 2021. The amendment covers a $72.8 million payment that was due on May 15, and the lender agreed not to enforce payment of any future quarterly amounts due in 2020 under the guarantee and defer such payments to February 2021,” Moody’s said in a press release.

The agency said it views the amendment as a distressed exchange default, citing weak liquidity, high leverage and significant pressure on Equinox’s cash flow.

Moody’s said it will remove the LD designator from the probability of default rating in about three days.

The outlook remains negative.

DBRS cuts Hertz

DBRS said it downgraded the long-term issuer rating and long-term senior debt rating of the Hertz Corp. to D from CC and removed the ratings from under review with negative implications.

“This rating downgrade follows Hertz’s May 22, 2020 filing for bankruptcy protection under Chapter 11,” DBRS said in a press release.

Fitch cuts Latam

Fitch Ratings said it downgraded Latam Airlines Group SA to D from CC and its national scale rating to D(cl) from CC(cl).

“The downgrades to D follow Latam’s announcement that it, together with its affiliates in Chile, Peru, Colombia, Ecuador and the United States, initiated a reorganization and restructuring of their debt under Chapter 11 protection in the United States,” Fitch said in a press release.

Fitch affirmed Latam Finance Ltd.’s unsecured notes at C, but revised the recovery rating to RR6 from RR5.

The revision of the recovery rating reflects the added subordination of this debt and lower expected recoveries following the announcement that Latam’s main shareholders intend to provide $900 million of senior secured debtor-in-possession financing, the agency said.

Fitch downgrades Oi

Fitch Ratings said it downgraded Oi SA’s ratings, including the long-term foreign-currency issuer default rating to CCC+ from B-, the local-currency IDR to CCC+ from B-, the national rating to B(bra)/stable from BB-(bra)/stable and the 2025 notes to CCC+/RR4 from B-/RR4.

Fitch removed the outlook on the international ratings.

“The downgrade reflects the company’s weak operating trends and the deterioration in the Brazilian operating environment, which will hinder Oi’s return to growth. While the company has adequate liquidity in 2020, the company’s business model and financial performance is unsustainable relative to capex requirements and debt service in 2022 and beyond,” Fitch said in a press release.

Moody’s trims Parts Holding Europe

Moody’s Investors Service said it downgraded to Caa1 from B3 the corporate family rating and to Caa1-PD from B3-PD the probability of default rating of Parts Holding Europe SAS.

Concurrently, Moody’s also downgraded to Caa1 from B3 the ratings on the senior secured notes issued by Parts Europe SA.

“While we expect activity levels to recover reasonably well as lockdown measures are easing in the company’s core markets, the impact of the lockdown on the company’s earnings and cash flow is likely to result in a deterioration in PHE’s credit metrics, notably a Moody’s-adjusted debt/EBITDA likely to stay above 8x over the next 12-18 months and uncertainty as to whether the company will be able to generate positive free cash flow on a sustainable basis,” said Eric Kang, a Moody’s vice president, senior analyst and lead analyst for PHE, in a press release.

The outlook on both entities is stable.

Moody’s downgrades SAS

Moody’s Investors Service said it downgraded the corporate family rating of SAS AB to Caa1 and its probability of default rating to Caa2-PD.

Concurrently Moody’s downgraded the senior unsecured ratings to (P)Caa2 and the subordinated ratings to Caa3 issued by SAS Denmark-Norway-Sweden. All long-term ratings remain on review for downgrade.

The pandemic hit the company in February and early March 2020 with restrictions on flights to and from China, Asia Pacific and other regions. “As the outbreak spread SAS reduced its capacity by 95% in April and we do not expect a material increase from those levels over the next few weeks,” Moody’s said in a press release.

The downgrade reflects the increased duration and severity of the pandemic and the agency’s forecast the airline industry won’t recover to 2019 passenger volumes until 2023 at the earliest, Moody’s said.

Moody’s downgrades Technicolor

Moody’s Investors Service said it downgraded Technicolor SA’s corporate family rating to Caa2 from Caa1, probability of default rating to Caa2-PD from Caa1-PD and ratings on the senior secured bank credit facilities maturing 2023 to Caa2 from Caa1.

Concurrently, Moody’s placed the ratings of the on review for downgrade and changed the outlook to under review from stable.

“The company was already weakly positioned in its previous rating category considering its highly leveraged capital structure per end of the last fiscal year. Furthermore, the downgrade reflects the increasing risk of a capital restructuring, which follows prolonged challenges pre the outbreak of Covid-19 in most of Technicolor’s markets, evidenced by the company’s weak operating performance and in particular by strongly negative free cash flow generation leading to a tight liquidity and weakening credit metrics,” Moody’s said in a press release.

S&P cuts Travelex

S&P said it downgraded Travelex Holdings Ltd. to SD from CC after the company missed the interest payment on its €360 million senior secured notes on May 15, 2020, and entered a 30-day grace period to seek waiver and forbearance arrangements from its lenders.

Also, the agency lowered the rating on the senior secured notes to D from C. The recovery rating on the notes is unchanged at 5. The CCC issue and 1 recovery ratings on the £90 million super senior revolving credit facility remain unchanged.

“We do not believe that Travelex will make the interest payment due on the notes within the 30-day grace period,” the agency said in a press release.

Instead, S&P said it sees Travelex seeking a long-term solution to its capital structure.

S&P cuts Unit Corp.

S&P said it downgraded Unit Corp. and its senior unsecured rating to D from CC following the company’s filing to reorganize under Chapter 11 of the U.S. Bankruptcy Code.

Fitch downgrades Unit Corp.

Fitch Ratings said it downgraded Unit Corp. to D from CC. Fitch affirmed the senior secured revolver affirmed at CCC+/RR1 but cut the senior subordinated notes to C/RR6 from CC/RR4. The agency removed the rating watch negative.

“The downgrade reflects Unit’s announcement that it has signed a restructuring support agreement (RSA) and voluntarily filed for reorganization under Chapter 11 plan of the U.S. Bankruptcy Code on May 22, 2020,” Fitch said in a press release.

S&P lifts Equinox

S&P said it upgraded Equinox Holdings Inc.’s issuer rating to CCC from SD.

“The CCC rating reflects our assumption that Equinox will experience a spike in leverage and a significant cash burn rate while gyms are closed and possibly after they reopen, which could exhaust a substantial portion or all of the company’s liquidity and possibly result in a default over the next six to 12 months,” said S&P in a press release.

S&P affirmed the CCC+ rating on Equinox’s senior secured first-lien facility and the CC rating on its senior secured second-lien facility. The respective 2 and 6 recovery ratings are unchanged.

The outlook is negative.

Fitch changes GTT view to negative

Fitch Ratings said it changed the outlook to negative from stable for GTT Communications, Inc. and GTT Communications, BV.

“The negative outlook reflects the uncertainty regarding the company’s ability to grow revenues due to the timing and the extent to which GTT will have access to clients’ premises to perform installations in the current environment as the coronavirus pandemic has forced most people to work from home around the globe,” Fitch said in a press release.

Fitch affirmed the companies’ issuer ratings at B-. The agency also affirmed the senior secured revolving credit facility and the secured term loan at B/RR3 and the unsecured notes at CCC/RR6.

Moody’s assigns Ardagh notes Caa1

Moody’s Investors Service said it assigned a Caa1 rating to the proposed $600 million of senior unsecured notes due 2027 issued by Ardagh Packaging Finance plc and Ardagh Holdings USA Inc., subsidiaries of ARD Finance SA. ARD Finance is the top entity with rated debt within the restricted group of Luxembourg-based metal and glass packaging manufacturer Ardagh Group SA.

Proceeds will be used to tender for a portion of the Caa1 rated 6% senior unsecured notes due 2025. If the conditions of the tender offer are not met, the proceeds will be used to redeem a portion of the existing 4¼% senior secured notes due 2022 or to purchase the senior unsecured notes due 2025 in the open market and to pay for transaction fees.

All other ratings of Ardagh, including the B3 corporate family rating, B3-PD probability of default rating and instrument ratings of its subsidiaries remain unchanged.

The outlook is stable.

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