S&P lowers Signa Development

S&P said it lowered its ratings for Signa Development Selection AG (SDS) to CC from CCC. The recovery rating on the senior unsecured debt remains unchanged at 4, with a slightly lower recovery prospect of about 35%, compared with 40% previously.

SDS’ main shareholder Signa Holding GmbH filed for insolvency on Nov. 29. S&P said it expects SDS to default shortly.

“The default could arise from the non-payment of interest or debt, cross acceleration, debt restructuring-which we would view as a distressed transaction under our criteria–or filing for insolvency.

“We understand that SDS has not filed for insolvency at this stage. Yet, we believe the contagion risk is very high and will likely impair SDS' ability to service its debt over the next few months. This is because of the existing liquidity shortfall at SDS, which has insufficient access to funding and the significant share Signa Holding GmbH has in SDS,” S&P said in a press release.

The outlook is negative.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.