Moody’s rates Edcon notes Caa1, Caa2

Moody's Investors Service said it assigned a Caa1 (LGD3) rating to the new super senior payment in kind (PIK) notes due June 2019 and a Caa2 (LGD4) rating to the new senior secured PIK toggle notes due June 2019 issued by Edcon Ltd.

Concurrently, the agency withdrew the Caa3 rating on the remaining senior unsecured notes due 2022 issued by Edcon Holdings Ltd.

The outlook is stable.

Moody’s said the actions follow the conclusion of the final stage of an exchange offer on Nov. 27, which invited the bond holders of the €425 million senior unsecured notes due 2022, in broad terms, to exchange its debt holdings at below par value with an improved position within the capital structure.

Under the exchange offer, participating senior unsecured note holders swapped their holdings in the €425 million senior unsecured notes for a combination of new super senior PIK notes due 2019 totaling €116.4 million, €36.2 million senior secured PIK toggle notes due 2019 and equity warrants.

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