S&P ups TPx, rates loans CCC, CC

S&P said it raised its rating on TPx Communications (U.S. TelePacific Holdings Corp.) to CCC from SD, selective default, and assigned CCC issue-level and 3 recovery ratings to its new $332 million first-lien credit facility and a CC issue-level and 6 recovery ratings to its new $33 million third-lien credit facility.

The 3 recovery rating indicates a meaningful (50%-70%; rounded estimate: 50%) recovery if TPx defaults and the 6 recovery rating reflects a negligible (0%-10%; rounded estimate: 0%) recovery in default.

The upgrade follows completed the exchange of its $655 million super-priority credit facility ($639 million outstanding) due 2026 and $19 million of its revolving credit facility due 2025 for a new debt structure that consists of three separate tranches, the agency said.

“Following TPx's debt restructuring, we continue to view its capital structure as unsustainable given the ongoing weak operating performance and pay-in-kind (PIK) feature of its term loans,” S&P said in a press release.

The outlook is negative.

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