S&P downgrades Edcon, notes, loans

Standard & Poor's said it lowered its corporate credit rating on Edcon Holdings Ltd. to SD from CCC+.

In addition, the agency downgraded its issue ratings on Edcon's senior secured notes (comprising €617 million and $250 million senior secured notes due March 2018) and the extended senior secured term loan due December 2017 to D from CCC. The recovery rating is unchanged at 5, reflecting an expectation of modest (10%-30%) recovery in the event of a payment default.

S&P also lowered its issue ratings on Edcon's senior secured PIK toggle notes due June 2019 to CCC- from CCC. The recovery rating is unchanged at 5, reflecting an expectation of modest (10%-30%) recovery in the event of a payment default.

Furthermore, S&P downgraded to its issue rating on Edcon's super senior secured debt, comprising of a ZAR 3,417,000,000 super senior revolving credit facility term loan, a ZAR 1.85 billion super senior refinancing facility, a €36 million super senior elevated term loan (all due December 2017) and €94,774,000 super senior PIK notes due June 2019 CCC+ from B-. The recovery rating is unchanged at 2, reflecting an expectation of substantial (70%-90%) recovery in the event of a payment default.

S&P said the downgrades follow Edcon's nonpayment of interest due March 15, on its 9½% euro- and dollar-denominated senior secured notes due March 2018 to its senior secured bondholders within the 30-day grace period, which expired on April 14. Under its criteria, S&P considers Edcon's missed interest payment as a payment default.

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