Medical Depot Holdings Inc. Downgraded To 'CC' On Distressed Debt Exchange; Rating Placed On CreditWatch Negative

Medical Depot Holdings Inc. has announced a restructuring with its secured lenders aimed at replenishing its near-term liquidity and giving the company more time to execute its turnaround plan. The proposed transaction includes, but is not limited to, the company taking out a $35 million new money term loan (currently unrated), temporary first-lien term loan amortization relief, and paid-in-kind (PIK) interest payments to second-lien lenders instead of cash. We view this transaction as a distressed exchange, tantamount to a default, as it is highly probable that lenders will receive less value than originally promised. Consequently, we are lowering the issuer credit rating to 'CC' from 'CCC'. We are also lowering the first-lien issue-level rating to 'CC' from 'CCC' and the

...September 23, 2019 - Medical Depot Holdings Inc. has announced a restructuring with its secured lenders aimed at replenishing its near-term liquidity and giving the company more time to execute its turnaround plan. - The proposed transaction includes, but is not limited to, the company taking out a $35 million new money term loan (currently unrated), temporary first-lien term loan amortization relief, and paid-in-kind (PIK) interest payments to second-lien lenders instead of cash. - We view this transaction as a distressed exchange, tantamount to a default, as it is highly probable that lenders will receive less value than originally promised. - Consequently, we are lowering the issuer credit rating to '##' from '###'. - We are also lowering the first-lien issue-level rating to '##' from '###' and the second-lien issue-level rating to 'C' from '##'. The recovery ratings remain unchanged. - The CreditWatch negative listing reflects our expectation that we will lower our ratings on the company...

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