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Moody's trims, rates TPx loans Caa1
Moody's Investors Service said it downgraded U.S. Telepacific Corp.'s (TPx) corporate family rating to Caa1 from BB and appended the probability of default rating with a limited default (LD) designation to reflect the conclusion of TPx's amendment to its credit facility agreement, which it considers a limited default, and affirmed the rating at Caa1-PD. The agency gave Caa1 ratings to TPx's new amended first-lien senior secured term loan and senior secured revolver.
Moody's also trimmed the ratings on the company's previous senior secured facilities to Caa1 from B3 and these will be withdrawn. The outlook was changed to negative from stable.
Last month, TPx extended the maturity on its revolver and bank loans by three years to 2025 and 2026, respectively. The amendment also provided for interest payment on the term loan to be paid in kind for a period of two years at the company’s option.
“Moody's views this amendment as amounting to a distressed exchange, which under Moody's definition is a default. The downgrade and the change of outlook to negative reflect the high leverage Moody's expects TPx to operate with for the coming 12-18 months as well as the weak liquidity profile of the company,” the agency said in a press release.
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