Research Update: Optiv Inc. Issuer Credit Rating Revised To 'CCC' From 'SD' Following Distressed Debt Exchange; Outlook Negative

Optiv has completed a distressed debt exchange of its second-lien debt in the fourth quarter of 2019, where it repurchased about $47 million of second-lien debt for about $23 million of cash. As of now, the second-lien trades at a significant discount to par, and the company has shown willingness to use its liquidity to retire additional debt, if there was an interested party willing to sell at a discount. We are revising the issuer credit rating on Optiv to 'CCC' from 'SD' (selective default). We are lowering our ratings on the $800 million first-lien debt due 2024 to 'CCC' from 'CCC+' and are removing them from CreditWatch, where we placed them with negative implications on March 27, 2020. We

...- Optiv has completed a distressed debt exchange of its second-lien debt in the fourth quarter of 2019, where it repurchased about $47 million of second-lien debt for about $23 million of cash. As of now, the second-lien trades at a significant discount to par, and the company has shown willingness to use its liquidity to retire additional debt, if there was an interested party willing to sell at a discount. - We are revising the issuer credit rating on Optiv to '###' from '##' (selective default). - We are lowering our ratings on the $800 million first-lien debt due 2024 to '###' from '###+' and are removing them from CreditWatch, where we placed them with negative implications on March 27, 2020. - We are also raising our issue level rating on the $230 million second-lien debt due 2025 to '##' from 'D'. - The negative outlook reflects our view the company may struggle to revive performance, reduce leverage, and drive positive free cash flow in 2020 during a time of projected negative GDP...

Research Update