S&P downgrades Axtel

Standard & Poor's said it lowered the corporate credit rating on Axtel SAB de CV to CC from B- following its proposed debt exchange offer and add-on.

S&P also affirmed the B issue level rating and recovery ratings of 2 on the company's senior secured notes due 2020. Under the proposed exchange and reopening, the outstanding 2020 notes principal could increase to $394.6 million.

The outlook is negative.

"The downgrade follows Axtel's announcement of an offer to exchange up to $110 million of its outstanding 2017 and 2019 senior unsecured notes for senior secured notes due 2020," said S&P credit analyst Marcela Duenas in a news release.

S&P said it views this as a distressed exchange and tantamount to a default, despite the security interest over almost all of Axtel's assets.

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