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S&P cuts Kimball Hill
Standard & Poor's said it lowered the corporate credit rating on Kimball Hill Inc. to CC from CCC+ and removed it from CreditWatch, where it was placed with negative implications on Jan. 3, and its senior subordinated notes to C from CCC-.
The outlook is negative.
S&P said the downgrades follow Kimball Hill's announcement that due to additional impairment charges, the company violated the covenants for its senior credit facility under the limited duration waiver and amendment obtained in January.
Although Kimball Hill will continue discussions with its bank group, the agency noted that any acceleration of payments under its senior credit facility, of which $309 million was outstanding as of Dec. 31, would trigger a cross-default with its senior subordinated notes.
The agency said it would downgrade the senior subordinated notes to D if they receive less than full and timely payment in an exchange offer.
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