Moody's downgrades Korreden

Moody's Investors Service said it downgraded the corporate family rating of Korreden SA to Ca from Caa3 and the €300 million senior secured floating-rate notes due 2014 issued by subsidiary Akerys Holdings SA to C (LGD5, 87.73%) from Ca.

The downgrade reflects the revision of Akerys' probability-of-default rating, which underpins the corporate family rating, to Ca/LD from Caa3. "The revision of the [probability-of-default rating] recognizes Akerys' failure to make the interest payment on the €300 million notes to the noteholders prior to 3 March 2009, which was the expiration of the 30-day grace period provided in the indenture," Lynn Valkenaar, a vice president at Moody's, said in a statement.

Moody's said the terms of the proposed restructuring make it a distressed exchange and include replacing the existing €300 million bonds with €80 million in new notes of the same maturity.

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