Moody’s drops Light Tower, notes to C

Moody's Investors Service said it downgraded Light Tower Rentals, Inc.'s corporate family rating to C from Caa3, probability of default rating to C-PD from Caa3-PD and senior secured notes to C from Caa3.

The downgrade follows Light Tower’s Aug. 1 announcement, that it elected not to make the Aug. 1 interest payment of $13.4 million on its senior secured notes.

At the same time, the company engaged legal counsel to pursue either an out-of-court restructuring or a pre-packaged plan of reorganization under Chapter 11 of the United States Bankruptcy Code. The company is in the beginning negotiations of a Restructuring Support Agreement (RSA) with noteholders. Should a transaction occur under the RSA as currently envisioned, in exchange for the $330 million existing notes, noteholders would receive $30 million of new senior secured notes and 100% of reorganized equity.

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