Research Update: AFE S.A. Downgraded To 'SD' From 'CC' On Completed Debt Restructuring; Secured Note Rating Lowered To 'D'

On Feb. 9, 2024, AFE S.A. announced it had completed restructuring of its outstanding debt and the acquisition by funds managed by AGG Capital Management Ltd (AGG). We view the maturity extension of AFE's senior secured notes (SSNs) by six years to July 15, 2030, as tantamount to default, because we think that the proposed restructuring is distressed, and noteholders would receive less than the original SSNs' documentation promised. Therefore, we lowered our issuer credit rating on AFE S.A. to 'SD' (selective default) from 'CC'. At the same time, we lowered our issue-level rating on the company's SSNs to 'D'. We will likely raise the ratings on AFE and the SSNs shortly after we record the default based on a

...- On Feb. 9, 2024, AFE S.A. announced it had completed restructuring of its outstanding debt and the acquisition by funds managed by AGG Capital Management Ltd (AGG). - We view the maturity extension of AFE's senior secured notes (SSNs) by six years to July 15, 2030, as tantamount to default, because we think that the proposed restructuring is distressed, and noteholders would receive less than the original SSNs' documentation promised. - Therefore, we lowered our issuer credit rating on AFE S.A. to '##' (selective default) from '##'. - At the same time, we lowered our issue-level rating on the company's SSNs to 'D'. - We will likely raise the ratings on AFE and the SSNs shortly after we record the default based on a material improvement of its liquidity and debt maturity profile....

Research Update