S&P raises MMM to B- from D

Standard & Poor's said it raised its counterparty credit and secured debt ratings on MMM Holdings Inc. to B- from D.

The outlook is negative.

MMM (the downstream holding company of Innovacare Inc.) executed an amendment to its credit agreement that resolves all current defaults.

Following discussions with lenders earlier in 2015, the company elected not to make its third-quarter principal amortization payment on its first-lien term loan and had been operating under a forbearance agreement with lenders since Sept. 30.

Under the amended credit agreement, the company will no longer be required to make mandatory quarterly principal amortization payments. These payments were causing the company liquidity stress because of the need to maintain enough capital at its regulated entities to meet local regulatory requirements (in this case, a risk-based capital [RBC] ratio of at least 200%).

Per the amended credit agreement, the company will now be required make a debt prepayment of $10 million to $11,875,000 on March 31, 2016, with the amount depending on the RBC ratio of its regulated entities, and another debt prepayment for fiscal 2016 based on an excess-cash flow calculation (conditional on the company maintaining a RBC ratio of at least 200%).

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