S&P trims Pugnacious Endeavors facility

S&P said it lowered the rating on Pugnacious Endeavors Inc.'s senior secured credit facility to B from B+ and revised its recovery rating on the facility to 3 from 2. The 3 recovery rating indicates the expectation for meaningful recovery (50%-70%; rounded estimate: 50%) of principal in a hypothetical payment default.

“We lowered our issue-level rating and revised our recovery rating on the senior secured credit facility to reflect the company's revised proposed capital structure, which now comprises an undrawn $125 million revolving credit facility and a $2.2 billion dual-currency term loan. The previously proposed capital structure included a senior secured credit facility comprising a $1.48 billion first-lien senior secured term loan, an undrawn $100 million revolving credit facility, and $325 million of second-lien senior secured notes,” S&P said.

The company is also reducing its proposed preferred equity issuance to $400 million from $600 million. “We believe these changes have reduced the recovery prospects for the upsized senior secured credit facility relative to our estimated enterprise value at default,” S&P said.

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