...April 26, 2021 - Medical Depot Holdings Inc. has completed a debt exchange transaction that extended its first-lien debt maturity, suspended the first-lien debt amortization in 2021, and converted the paid-in-kind (PIK) loan into two series of preferred shares. We view the transaction as distressed. - While the transaction has enhanced Medical Depot's liquidity position, providing additional time and cushion for implementing its business improvement initiatives, we expect leverage to remain very high and cash flow generation negative. - We raised our issuer credit rating on Medical Depot to '###+' from '##' (selective default). The outlook is negative. - At the same time, we raised the issue-level rating on the existing first-lien debt to '###' from 'D'. The recovery rating is '5'. We are withdrawing our rating on the 1.5-lien convertible PIK loan because it was converted into preferred shares (not rated). - The negative outlook reflects persistently high leverage and cash flow deficits...
