Carestream Health Inc. announced a recapitalization agreement in which it will eliminate approximately $220 million of debt in connection with a debt for equity exchange. We view this transaction as a distressed exchange, tantamount to a default, as we believe lenders will receive less value than originally promised by exchanging debt for the company's equity. We therefore lowered our long-term issuer credit rating on Carestream Health to 'CC' from 'B-' and placed it on CreditWatch with negative implications. We also lowered the second-lien issue-level rating to 'CC' from 'CCC+' and placed our 'B-' first-lien issue-level rating on CreditWatch with negative implications. The negative CreditWatch placement reflects our expectation that we will lower our issuer credit rating to 'SD' (selective default)
