On March 6, 2018, Moody’s Investors Service appended a limited default (LD) designation to PaperWorks Industries, Inc.’s probability of default rating, changing the PDR to Ca-PD/LD from Ca-PD. All other ratings remain unchanged, including the Ca rating on the senior secured notes due 2019 and the Ca corporate family rating. According to Moody’s, the change in the PDR follows the Company’s announcement that it has exchanged the Company’s 9.5% senior secured notes due 2019 for new debt and new common equity in the reorganized company. Moody’s considers the transaction a distressed exchange, which is an event of default under Moody’s default definition.
On March 6, 2018, S&P Global Ratings lowered its corporate credit rating on PaperWorks Industries Holding Corp. to SD from CC and its $365 million secured notes to D. According to S&P Global, the downgrade follows the close of PaperWorks’ restructuring transaction. The Company has exchanged its $360 million secured notes outstanding for a new $45 million term loan and majority ownership of the Company. S&P views this as a distressed exchange as the existing noteholders received significantly less than par value. Read more on distressed companies.
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