Moody’s upgrades SAS

Moody’s Investors Service said it upgraded SAS AB’s ratings and appended its probability of default rating with the /LD (limited default) designation. Moody’s said it views the company’s conversion of senior and subordinated debt into equity or hybrid debt as a distressed exchange which it considers a default. The agency will remove the /LD designation from the company’s PDR after three days.

Moody’s upgraded the corporate family rating to B3 from Caa2 and SAS’ probability of default rating to B3-PD/LD from Ca-PD. Concurrently Moody’s also upgraded the instrument rating of SAS Denmark-Norway-Sweden’s Swiss franc-denominated perpetual guaranteed subordinated notes to Caa1 from Caa3.

“The rating action reflects the completion of a recapitalization plan that includes the conversion of hybrid debt into common equity and the conversion of senior unsecured debt into a mixture of new hybrid debt and common equity,” Moody’s said in a press release.

The agency revised the outlooks for both companies to negative.

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