Garfunkelux Holdco 2's (Lowell's) leverage remains very high and its deleveraging is further delayed, given muted performance so far this year. We also believe that Lowell's access to financial markets is constrained, given the very high current yield on its bonds and negative investor sentiment toward the distressed debt purchaser sector overall. Given limited options to refinance its public debt maturing in 2025, we see an increasing risk of a distressed restructuring, which we could consider a default if investors are not adequately compensated for the amended terms. We therefore lowered our issuer credit ratings on Lowell to 'CCC+/C' from 'B/B' and on its senior notes to 'CCC+ from 'B'. The negative outlook reflects the risk of a distressed exchange
