Moody’s cuts Elli Investments

Moody's Investors Service said it appended a LD (limited default) designation to the Caa3-PD probability of default rating of Elli Investments Ltd. (Four Seasons), a U.K. health and social care provider.

The agency concurrently downgraded the rating of the £175 million senior unsecured notes due 2020 issued by Four Seasons to C from Ca.

The company’s other ratings are unchanged, namely, the Caa3 corporate family rating and the Caa3 rating of the £350 million senior secured notes due 2019 issued by Elli Finance (UK) plc.

The outlook is negative.

Moody’s said the appending of the probability of default rating with an "/LD" designation indicates limited default and reflects the missed interest payment on the senior secured and unsecured notes on Dec. 15 and the subsequent failure to make the payment during the 30-day grace period that expired on Jan. 14, which constitutes a default under the agency’s definition.

“The downgrade of the rating of the unsecured notes reflects Moody's revised assessment of their expected recovery in light of the restructuring proposal received by Four Seasons from H/2, the company's largest lender. Whilst the restructuring negotiations are ongoing, Moody's now expects a recovery rate of less than 35% for the senior unsecured notes, a level more consistent with the C rating,” the agency explained in a news release.

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