Fitch downgrades MIE

Fitch Ratings said it downgraded MIE Holdings Corp.'s long-term issuer default rating to C from CC.

The rating on MIE's $316 million 7½% senior unsecured bonds due April 25, 2019 was affirmed at C with a recovery rating of RR6.

The downgrade of the long-term issuer default rating and the affirmation of 2019 notes are driven by MIE's exchange offer for its 2019 bonds, which Fitch considers to be a distressed-debt exchange, Fitch said.

The recovery rating of RR6 for the 2019 notes reflects a cash recovery value of 10% or less for the 2019 notes being exchanged, the agency noted.

Fitch said it considers the exchange offer for the 2019 notes a necessary move by MIE to avoid payment default in April, given its tight liquidity.

The agency said it considers the three-year extension of the maturity date and the significantly lower-than-expected amount the bondholders were supposed to receive for the original securities as a material reduction in terms.

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