Fitch cuts then lifts Tele Columbus

Fitch Ratings said it downgraded Tele Columbus AG's (TC) long-term issuer default rating to RD, restricted default, from C on failing to pay the Nov. 2 coupon once the original 30-day grace period expired.

The agency said it subsequently upgraded the long-term IDR to C because the company entered into a lock-up agreement with the majority of its creditors and made a formal offer to all of its creditors on terms that would be consistent with a distressed debt exchange based on its criteria.

Fitch also affirmed the CC/RR3 (53%) ratings on TC’s senior secured term loan and senior secured notes due 2025.

“TC made a formal restructuring offer to all its creditors asking to extend the maturity of its entire debt at par to October 2028 while agreeing to receive payment-in-kind (PIK) interest. Fitch views this offer as a material reduction in terms leading to a DDE. As an incentive to accept the deal, shareholders committed to contribute €300 million in fresh equity (including already provided shareholder loans) if the restructuring transaction goes through. The company expects the restructuring transaction to be concluded by March 2024,” the agency said in a press release.

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