S&P downgrades SEAT

Standard & Poor's said it lowered to D (default) from SD (selective default) its long-term corporate credit rating on SEAT PagineGialle SpA.

The agency also said it lowered the rating on the company's €686 million new senior secured facilities, including a new €90 million revolving credit facility, to D from CC. The recovery rating on these instruments remains unchanged at 3, reflecting 50% to 70% expected default recovery.

The rating on SEAT's €750 million senior secured notes and €65 million new senior secured notes remains unchanged at D. The recovery rating on these notes also remains unchanged at 3, reflecting 50% to 70% expected recovery in a default.

The downgrades reflect SEAT's failure to pay the interest on its €686 million senior secured facilities on the due date of Feb. 6, S&P said. The agency said it does not believe that the company will make the interest payment within the following five business days.

This is because SEAT is contemplating a second round of financial restructuring since recent adverse macroeconomic and market developments make its existing capital structure unsustainable, S&P said.

The downgrade also considers an understanding that SEAT has now failed to pay all, or substantially all, of its obligations when they were due. SEAT already delayed the interest payments on its €750 million and €65 million senior secured bonds in late January 2013, the agency said.

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