On May 20, 2016, S&P Global Ratings lowered its corporate credit rating on Spanish Broadcasting System, Inc. (SBS) to CCC from CCC+ and its 12.5% senior secured notes due 2017 to CCC from CCC+. “The downgrade reflects our view that SBS will not be able to repay its 12.5% notes due April 2017, given its inability to incur new debt due to debt incurrence limitations from its preferred stock,” said S&P Global Ratings credit analyst Jawad Hussain. According to S&P Global, the limitation occurred after the Company failed to repurchase the preferred stock in 2013 when it was required to do so. If the Company is unable to amend this restriction and refinance its 12.5% notes or generate enough spectrum sale proceeds to repay the notes, S&P believes it will face a payment default in April 2017 when the notes are due. Read more on distressed companies.
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