S&P cuts U.S. TelePacific

S&P said it dropped its ratings for U.S. TelePacific Holdings Corp. (TPx Communications) to SD, selective default, from CCC- and its senior secured debt to D from CCC-.

TPx completed the exchange of its $663 million senior secured term loan B due in May 2026. About half of the debt will be up-tiered into a new super-senior first-lien tranche; the rest will be bought by private equity sponsor Siris Capital at 40% of par.

“We view the transaction as a distressed exchange given the high likelihood of a conventional default without it and our view that lenders did not receive adequate compensation for the debt restructuring,” S&P said in a press release.

The agency said it plans to reevaluate TPx’s new debt “as soon as practicable.”

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