S&P lowers United Distribution

S&P said it lowered the corporate credit rating on United Distribution Group Inc. to CCC from CCC+.

The outlook is negative.

S&P also said it lowered the rating on United Distribution's first-lien revolving credit facility and term loan due in October 2018 to CCC+ from B- with a 2 recovery rating.

The agency also lowered the rating on its second-lien term loan due in April 2019 to CC from CCC- with a 6 recovery rating.

The 2 recovery rating, which is unchanged, indicates 70% to 90% expected default recovery.

The 6 recovery rating, also unchanged, indicates 0 to 10% expected default recovery.

The downgrades reflect the fact that the senior secured term loan is due in less than 12 months, S&P said.

The company has insufficient cash to meet its debt obligations and a poor standing in the credit markets, the agency explained.

The negative outlook reflects a view of growing default risks that could cause the S&P to lower the company’s ratings by one notch in April 2018 if the company does not have a viable plan to refinance its first-lien term loan due in October 2018, S&P said.

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