Moody’s cuts SoLocal, PagesJaunes notes to Ca

Moody's Investors Service said it downgraded SoLocal Group SA's corporate family rating to Ca from Caa2, probability of default rating to Ca-PD from Caa2-PD and the rating of the €350 million senior secured notes due 2018 issued by PagesJaunes Finance & Co. SCA to Ca from Caa2.

The outlook on all ratings is negative.

The downgrade of SoLocal's ratings follows the Aug. 1 announcement of its Financial Restructuring Plan (FRP). The FRP proposes a reduction in gross debt to €400 million from €1,164,000,000 based on a mixture of prepayment, equitization and distressed exchange.

The FRP is subject to final approval from the board of directors as well as shareholder and creditor approval. SoLocal is being assisted in the restructuring process by a court-appointed mandataire ad hoc. Moody's expects the restructuring process to be concluded in the fourth quarter.

The action reflects the proximity to a distressed exchange, which is a default under the agency’s methodologies, if the FRP is successfully completed as planned.

In light of SoLocal's recent performance and future prospects, as well as the debt reduction planned under the announced FRP, Moody's said it expects SoLocal's family recovery rate to be in the 35%-65% range, which is consistent with a corporate family rating of Ca.

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