Research Update: TalkTalk Telecom Group Ltd. Downgraded To 'CC' On Proposed Debt Restructuring; Outlook Negative

On Sept. 2, 2024, TalkTalk Telecom Group Ltd. (TalkTalk) entered into a binding lockup agreement with its major shareholders and a group of senior lenders, which together hold approximately 70% of the company's secured debt. They plan to exchange the revolving credit facility (RCF) and senior secured notes into new first lien and second lien instruments and extend their maturities to September 2027 and March 2028, respectively. We expect the restructuring will be completed over the next few months and view the proposed transaction as a distressed exchange and tantamount to a default under our criteria. We therefore lowered our long-term issuer credit rating on TalkTalk and our issue rating on its senior secured notes to 'CC' from 'CCC-'. The

...- On Sept. 2, 2024, TalkTalk Telecom Group Ltd. (TalkTalk) entered into a binding lockup agreement with its major shareholders and a group of senior lenders, which together hold approximately 70% of the company's secured debt. They plan to exchange the revolving credit facility (RCF) and senior secured notes into new first lien and second lien instruments and extend their maturities to September 2027 and March 2028, respectively. - We expect the restructuring will be completed over the next few months and view the proposed transaction as a distressed exchange and tantamount to a default under our criteria. - We therefore lowered our long-term issuer credit rating on TalkTalk and our issue rating on its senior secured notes to '##' from '###-'. - The negative outlook indicates that we will lower the ratings on TalkTalk and its senior secured notes to 'D' (default) when a debt restructuring becomes effective or in the event of a conventional default. Following the restructuring implementation,...

Research Update