S&P slices TPx

S&P said it sliced two notches on its ratings for U.S. TelePacific Holdings Corp. (TPx Communications), including to CCC- from CCC+.

“The downgrade follows the company's receipt of a notice of default because it failed to deliver its third-quarter financials and compliance certificate on time. We believe that TPx is looking to negotiate an amendment to its senior secured credit facility that would provide it with additional runway to transition its business model amid the ongoing declines in its legacy telecommunications segment,” S&P said in a press release.

“Based on our view that, absent this proposed amendment, the company would likely default on its debt obligations over the next couple of years, a maturity extension would be treated as a distressed restructuring because the company would not fulfill its obligation in accordance with the original terms of the credit agreement,” S&P added.

The outlook is negative.

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