S&P cuts Rackspace Technology

S&P said it downgraded its ratings for Rackspace Technology Global Inc. to SD, selective default, from CCC+, its senior unsecured notes due in 2028 to D from CCC- and affirmed the CCC+ ratings on the company's senior secured debt. The recovery ratings on this debt are unchanged.

Rackspace Technology has continued making open market repurchases of its senior unsecured notes at deep discounts to the original principal, spending roughly $67 million since March 31, 2023, to take out about $199 million in original principal, the agency noted.

“The rating action follows Rackspace's below-par debt repurchases and reflects our belief that they are distressed and tantamount to a default under our criteria. This is because of operational challenges and financial strain facing the company despite it pursuing the repurchases in the open market and lacking near-term maturities,” S&P said in a press release.

The agency added that in the next few business days, it plans to upgrade Rackspace’s issuer credit rating to the CCC category from SD.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.