S&P downgrades Erickson

S&P said it downgraded Erickson Inc. to CCC from CCC+.

The agency also said it lowered the rating on the company’s second-lien debt to CCC from CCC+.

The 3 recovery rating on the second-lien debt is unchanged, indicating 50% to 70% expected default recovery.

The outlook is negative.

The downgrade reflects the current pressure on Erickson’s liquidity and capital structure, which is believed to be unsustainable over the long-term, S&P said.

The downgrade also follows two recent company announcements detailing the appointment of a new chief financial officer who has experience in debt restructuring, along with the hiring of financial advisors to explore strategic alternatives, the agency said.

These recent developments have made it increasingly likely that the company will pursue a debt exchange or other restructuring in which the holders of its second-lien debt will receive less than their promised value, S&P said.

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