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S&P cuts TPx
S&P said it downgraded its rating for U.S. TelePacific Holdings Corp. (TPx Communications) to SD, or selective default, from CCC- and its senior secured debt to D from CCC-.
The downgrade follows TPx’s completion of its exchange of its $582 million outstanding senior secured term loan B due May 2023 for a new super senior term loan B due May 2026, to be rated later. It also extended the maturity of the $25 million revolving credit facility to November 2025 from May 2022, the agency said.
“We view the transaction as a distressed exchange given the high likelihood of a conventional default in the absence of the transaction, and our view that despite the higher rate on the term loan, the pay-in-kind (PIK) feature for the first two years is not sufficient compensation for the maturity extension,” S&P said in a press release.
The agency said it plans to reassess TPx’s ratings in the next couple of weeks.
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