S&P downgrades Truvo

Standard & Poor's said it lowered Truvo Intermediate LLC's long-term corporate credit rating to CC from CCC+ and Truvo Subsidiary Corp.'s €395 million 8½% notes and $200 million 8 3/8% notes to C with an unchanged recovery rating of 6 from CCC-.

The outlook is negative.

The downgrade follows Truvo's appointment of an ad hoc committee of lenders under its senior facilities agreement to assist the group in exploring and evaluating various business, financing and capital structure alternatives.

The agency said the downgrade mainly reflects its view that the implementation of a capital restructuring of the highly leveraged group is a clear risk within the next few months. S&P said it will view any distressed exchange offer as tantamount to default.

The downgrade also reflects the agency's opinion that Truvo's capital structure is likely to become unsustainable over the near term because of very high leverage, weak free cash flow generation and, potentially, further deterioration in the group's operating performance.

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