Tosca Services LLC completed a debt exchange, which included a conversion of its existing first-lien term loan to a second-out, first-lien term loan with a two-year maturity extension and payment-in-kind (PIK) feature. In addition, Tosca's new $100 million super-priority, first-out, first-lien term loan subordinates the current first-lien debt. In our view, the conversion and maturity extension of its existing first-lien term loan falls short of the original promise to lenders. Under the proposed terms of the transaction, we view the exchange as distressed and tantamount to a default because the existing capital structure is unsustainable, in our view, evidenced by the persistent free operating cash flow (FOCF) deficit. Therefore, we lowered our issuer credit rating on Tosca to 'SD' (selective
