S&P slices TPx

S&P said it downgraded its ratings for U.S. TelePacific Holdings Corp. (TPx Communications) and its $655 million senior secured term loan and $25 million revolver to CCC- from CCC+. The 4 recovery rating on the loans, indicating average (30%-50%; rounded estimate: 40%) recovery in default is unchanged.

“TPx has limited headroom under its maximum leverage covenant and we believe a covenant breach is likely over the next couple of quarters. The company has a maximum leverage covenant of 15.6x, which we believe it was in compliance with as of year-end 2022, albeit with limited headroom.

“However, the covenant steps down to 12.9x in the first quarter of 2023 and 11.7x in the second quarter of 2023. Given our expectation for a continued weak operating performance, we believe it will be difficult for TPx to remain in compliance with the covenant absent an equity infusion from its private-equity sponsor Siris Capital,” S&P said in a press release.

The outlook is negative.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.