S&P revises ION view to negative

S&P said it revised the outlook for ION Geophysical Corp. to negative from stable and affirmed the company’s CCC+ rating as well as the B- rating on its second-lien notes with a 2 recovery rating.

“Our outlook revision to negative reflects the company's need to refinance its second-lien notes due in December 2021 as capital markets for oil and gas service companies remain challenging. Additionally, we do not expect the company to generate sufficient discretionary cash flow or have enough availability on its credit facility to address the entire maturity. Therefore, in our opinion, there is greater risk of the company executing a transaction we could view as distressed,” said S&P in a press release.

S&P trims California Resources

S&P said it downgraded California Resources Corp. to CC from CCC+ and dropped the rating on its 2021, 2022, and 2024 notes to CC. The rating action follows an announcement of a debt exchange offer targeting its second-lien notes due 2022 as well as its remaining unsecured notes due 2021 and 2024. The outlook is negative.

The recovery rating on the 2022 second-lien notes remains 2, indicating an expectation of substantial (70%-90%; rounded estimate: 80%) recovery in the event of a payment default. Similarly, the recovery rating on the 2021 and 2024 unsecured notes remains 6, indicating the expectation of negligible (0%-10%; rounded estimate: 0%) recovery in the event of a payment default.

S&P affirmed the B issue-level rating on the company's first-lien loans. The recovery rating remains 1, indicating the expectation of very high (90% to 100%; rounded estimate: 95%) recovery.

Additionally, the company is soliciting consents from holders of each issue to permit the incurrence of more secured debt (requiring at least a majority of the principal amount of each issue). The proposed transactions are not contingent on a minimal amount of notes tendered nor receipt of the aforementioned consents. The offers expire on March 18, with an early participation deadline of March 4. The transaction is currently supported by about 25% of the second-lien notes, 27% of the 2021's and 5% of the 2024's.

Moody's downgrades Greenway

Moody's Investors Service said it downgraded Greenway Health, LLC's corporate family rating to Caa1 from B3 and probability of default rating to Caa1-PD from B3-PD. Moody's also downgraded the ratings on the senior secured bank credit facilities to Caa1 from B3. The outlook is negative.

The downgrade reflects Moody's expectations of ongoing operating challenges over the next year following a sharp decline in the company's earnings and weakened liquidity as a result of the settlement reached with the U.S. Department of Justice for $57.3 million in February 2019.

Greenway also incurred associated expenses during 2019 to implement mandated requirements and ensure product compliance. Moody's expects some of these costs to continue into 2020 and 2021. Accordingly, Moody's said it projects the company to sustain very high leverage of around 10x adjusted debt-to-EBITDA with negative free cash flow in 2020.

In addition, class action litigation is in the early stages, which means there is a high level of uncertainty related to potential liabilities.

S&P sinks VIP Cinema

S&P downgraded the ratings on VIP Cinema and its senior secured first-lien debt to D from CCC after the company filed a voluntary petition to reorganize under Chapter 11 of the U.S. Bankruptcy Code.

The agency downgraded the rating on the second-lien debt to D from C. The recovery ratings on the debt are unchanged.

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