Port Washington, N.Y.-based durable medical device manufacturer Medical Depot Holdings Inc. recently completed a transaction to extend its first-lien debt maturity, suspend the first-lien debt amortization in 2021, amend the 1.5-lien convertible paid-in-kind (PIK) loan, and convert the PIK loan into two series of preferred shares. We view this transaction as a de facto restructuring given the company's distressed operations and the limited compensation offered to lenders. We lowered our issuer credit rating to 'SD' (selective default) from 'CCC+'. We also lowered the issue-level ratings on the first-lien debt to 'D' from 'CCC' and on the 1.5-lien debt to 'D' from 'CCC-'. Our 'CCC-' rating on the company's second-lien debt is unaffected. The downgrade follows the disclosure that Medical Depot
