Research Update: Pluto Acquisition I Inc. Downgraded To 'SD' (Selective Default) On Distressed Exchanges

Pluto Acquisition I Inc. completed a debt restructuring transaction that included exchanges into new term loans under a new credit agreement. First- and second-lien term loan holders were exchanged into new loans with extended maturities that will rank junior to both a new $175 million first-out obligation and an existing revolving credit facility that was previously ranked pari passu with the prior first-lien term loan. We view the exchanges as distressed and tantamount to a default because both first- and second-lien term loan lenders will receive less that the promises under the original securities. As a result, we lowered our issuer-credit rating on Pluto to 'SD' (selective default) from 'CC' and lowered our issue-level rating on its first-lien term loan

...- Pluto Acquisition I Inc. completed a debt restructuring transaction that included exchanges into new term loans under a new credit agreement. First- and second-lien term loan holders were exchanged into new loans with extended maturities that will rank junior to both a new $175 million first-out obligation and an existing revolving credit facility that was previously ranked pari passu with the prior first-lien term loan. - We view the exchanges as distressed and tantamount to a default because both first- and second-lien term loan lenders will receive less that the promises under the original securities. - As a result, we lowered our issuer-credit rating on Pluto to '##' (selective default) from '##' and lowered our issue-level rating on its first-lien term loan to 'D' (default) from '##'. - We also withdrew our rating on the now-replaced revolving credit facility. - We expect to reassess our issuer and issue-level ratings on Pluto in the near term to reflect the post-transaction debt...

Research Update