S&P lowers Sterling, notes

S&P said it lowered its issuer credit rating on Sterling Mid-Holdings Ltd. and its rated subsidiaries to CC from CCC+.

The outlook is negative.

At the same time, the agency lowered the ratings on the company's senior secured payment-in-kind toggle notes and senior secured notes to CC from CCC-. The recovery rating on the notes remains 6, indicating an expectation for negligible recovery (0%-10%) in the event of default.

LSF8 Sterling Partners LP, an affiliate of Lone Star Funds that owns DFC Global Corp. through Sterling Mid-Holdings, announced a cash tender offer to purchase any and all outstanding 10˝%/12% senior secured payment-in-kind toggle notes due 2020 and 10˝% senior secured notes due 2020 at 65% and 62% of par, respectively.

“If the transaction occurs, we would view it as a distressed debt exchange tantamount to a default,” S&P said in a news release.

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