S&P lowers Cognor

Standard & Poor's said it lowered its long-term corporate credit rating on Cognor SA to SD (selective default) from CC and its short-term corporate credit rating on Cognor to SD from C.

At the same time, the agency reinstated its CC issue rating on the €118 million senior secured notes, due Feb. 1, 2014, issued by subsidiary Zlomrex International Finance SA. Due to an error, the senior secured notes were marked as "not rated" in S&P's systems on Feb. 1. The agency subsequently lowered the issue rating on the €118 million senior secured notes to D (default) from CC.

S&P said the downgrade follows Cognor's Jan. 28 announcement that a court has recognized the "scheme of arrangement" under which the company will exchange the €118 million outstanding of its senior secured notes due Feb. 1, 2014, for new senior secured and exchangeable notes.

According to S&P's criteria, it views this as a distressed exchange and tantamount to a default.

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