S&P drops Alvaria to D

S&P said it dropped its ratings for Atlas Midco Inc. (Alvaria), its secured term loans and revolver to D from CCC+.

On March 20, the company finished its private debt restructuring with 87% of its first-lien lenders and 77% of its second-lien lenders, totaling 84% of total funded debt. Then Alvaria reported a below-par public debt exchange for the rest of the lenders.

S&P said it considers the exchanges equivalent to default because the lenders will get less than originally promised.

Consenting first- and second-lien term loan lenders will effectively get 90 cents and 80 cents on the dollar, respectively, on originally funded debt commitments. In exchange, first-lien lenders will receive a mix of first-lien, second-out debt and first-lien, third-out debt, and second-lien lenders will receive a mix of first-lien, third-out debt and first-lien, fourth-out debt, all due in May 2028. S&P said it is not rating the exchange loans.

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