S&P lowers Sprint Industrial

S&P said it lowered the corporate credit rating on Sprint Industrial Holdings LLC to SD (selective default) from CC.

The agency also said it lowered the rating on the company's second-lien term loan to D from C.

The 6 recovery rating is unchanged, indicating 0 to 10% expected default recovery.

S&P said it affirmed the CCC- rating on the company's first-lien credit facilities. The 2 recovery rating is unchanged, indicating 70% to 90% expected default recovery.

The downgrades follow Sprint Industrial's amendment of its first- and second-lien credit facilities, the agency said.

Pursuant to the amendment of its second-lien term loan, the company will pay interest on the term loan in-kind at a 13.5% interest rate from Dec. 30, 2016 through maturity, S&P said.

The agency said it considered this amendment as tantamount to a default given the company's distressed financial position because of its weak liquidity and because the lenders will receive less than they were promised under the original credit agreement.

The agency said it expects to raise the corporate credit rating on Sprint Industrial to CCC following a reassessment of the company's revised capital structure and liquidity.

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