Research Update: Airline Caterer gategroup Holding AG Downgraded To 'SD' (Selective Default)

gategroup has restructured its debt, including its €665 million senior debt and CHF350 million unsecured notes, with its shareholders providing a CHF25 million equity injection and a CHF475 million subordinated loan as part of the transaction to support the company's liquidity. As a result, the maturity of the notes and debt facilities was extended by five years to 2027 and 2026, respectively; additionally, the company now has an option to capitalize the interest paid on the senior loans. We view the financial restructuring as distressed and tantamount to default because we believe lenders will receive less than the original promise and that, without the restructuring, the company would likely have faced liquidity pressure over the near term. We are therefore

...- gategroup has restructured its debt, including its 665 million senior debt and CHF350 million unsecured notes, with its shareholders providing a CHF25 million equity injection and a CHF475 million subordinated loan as part of the transaction to support the company's liquidity. - As a result, the maturity of the notes and debt facilities was extended by five years to 2027 and 2026, respectively; additionally, the company now has an option to capitalize the interest paid on the senior loans. - We view the financial restructuring as distressed and tantamount to default because we believe lenders will receive less than the original promise and that, without the restructuring, the company would likely have faced liquidity pressure over the near term. - We are therefore lowering our issuer rating on gategroup to '##' from '###' and removing it from CreditWatch, where we placed it with negative implications on Nov. 18, 2020. - We will reassess gategroup's creditworthiness in the coming days,...

Research Update