S&P lowers Lecta to CC

S&P said it lowered the issuer credit rating on Lecta and issue ratings to CC from CCC-. The recovery rating remains unchanged.

The short-term rating remains C.

Lecta has announced its intention to restructure its debt with a combination of a debt exchange, new debt issuance and a debt-for-equity swap.

As part of the broader restructuring, existing noteholders have expressed support for additional interim liquidity of up to €60 million via a combination of factoring and additional borrowings. Lecta expects to receive this liquidity support in a few weeks, S&P said.

“We view this transaction as a distressed exchange, tantamount to a default, because we believe that lenders will receive less value than originally promised,” S&P said in a news release.

The CreditWatch with negative implications reflects that S&P will likely lower its ratings on the company to SD and its debt to D upon completion of the exchange.

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