S&P downgrades Trident, debt

S&P said it lowered the corporate credit rating on Trident Holding Co. LLC to CCC- from CCC+.

The ratings remain on CreditWatch, where they were placed with negative implications on Aug. 21.

At the same time, the agency lowered the rating on the first-lien debt issued by New Trident Holdcorp Inc. and Trident Clinical Services Holdings Inc. to CCC- from CCC+. The 3 recovery rating is unchanged, indicating an expectation for meaningful recovery (50%-70%; rounded estimate 65%) of principal in the event of a payment default.

S&P also lowered the issue-level rating on the second-lien debt issued by New Trident Holdcorp and Trident Clinical Services to C from CCC-. The 6 recovery rating is unchanged, indicating an expectation for negligible (0% to 10%, rounded estimate: 0%) recovery.

Trident is in violation of its financial coverage covenant as of the third quarter, as persistent industry headwinds were exacerbated by an increase in bad debt stemming from a change in collection systems, the agency explained.

“We view the company's current capital structure as unsustainable, with debt leverage of above 10x, and believe that absent a significant capital injection or restructuring of the capital structure the company would have difficulties meeting near term interest payments,” S&P said in a news release.

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