Fitch cuts Washington Prime

Fitch Ratings said it downgraded the long-term issuer default ratings of Washington Prime Group, Inc. and Washington Prime Group, LP to D from RD, due to the company's Chapter 11 filing.

Fitch upgraded the senior unsecured notes to CC/RR3 from C/RR4. “The upgrade reflects a lower cap rate Fitch applied to the assets, due to incremental data from recent restructurings and moving closer towards current market values given that the restructuring is more imminent,” the agency said in a press release.

On Friday, Washington Prime entered into a restructuring support agreement with certain creditors, representing 70% of secured and unsecured debt. On Sunday, the company filed for Chapter 11 under the U.S. Bankruptcy Code.

The RSA, which may be subject to change, provides for a deleveraging of the company's balance sheet by exchanging nearly $950 million of unsecured notes for equity and a $190 million paydown of the revolving credit and term loan facilities.

Washington Prime obtained $100 million in debtor-in-possession financing to support day-to-day operations during the Chapter 11 process.

Fitch said it may withdraw the ratings within 30 days.

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