Medical Depot Holdings Inc. has announced a restructuring with its secured lenders aimed at replenishing its near-term liquidity and giving the company more time to execute its turnaround plan. The proposed transaction includes, but is not limited to, the company taking out a $35 million new money term loan (currently unrated), temporary first-lien term loan amortization relief, and paid-in-kind (PIK) interest payments to second-lien lenders instead of cash. We view this transaction as a distressed exchange, tantamount to a default, as it is highly probable that lenders will receive less value than originally promised. Consequently, we are lowering the issuer credit rating to 'CC' from 'CCC'. We are also lowering the first-lien issue-level rating to 'CC' from 'CCC' and the
