S&P cuts Luxfer to negative watch

Standard & Poor's Ratings Services revised to negative from positive its credit watch implications on the CC long-term corporate credit rating and C senior unsecured debt rating on Luxfer Holdings plc.

This action follows the Oct. 13 announcement that Luxfer has reached an agreement in principle with the majority of existing bondholders for a recapitalization of the company, involving a debt-for-equity swap.

S&P said it views the completion of such exchange offers as tantamount to default if the total value of the securities offered can be less than the originally contracted amount, even though it may be greater than the current depressed market value of the debt.

Upon success of the exchange offer, the credit watch placement will be resolved with a downgrade of the corporate credit rating to SD, S&P said. Once the exchange offer has completed, ratings on the notes will be lowered to D.

SP said the rating on the company may be revised pending an review of its debt-servicing abilities after a planned recapitalization.

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