Moody’s lowers Technicolor

Moody’s Investors Service said it downgraded Technicolor SA’s rating on the senior secured bank credit facilities maturing 2023 to Ca from Caa3. Concurrently, the agency downgraded to Ca-PD from Caa3-PD the probability of default rating and confirmed the group’s Caa3 corporate family rating. Moody’s changed the outlook to negative from ratings under review.

The rating action concludes the review for downgrade started May 26, the agency said.

“The rating action reflects the proposed restructuring of the group’s capital, which would result in a material loss for investors if executed as proposed by Technicolor. We view the proposed distressed debt exchange as an event of default once the transaction closes,” Moody’s said in a press release.

The outlook reflects the possibility the proposed debt restructuring could be unsuccessful, resulting in a capital structure that remains unsustainable and the risk of liquidation with lower recovery for the creditors, the agency said.

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