Moody’s downgrades TriMark

Moody’s Investors Service said it TMK Hawk Parent Corp.'s (TriMark) senior secured term loan C rating to C from Ca.

The agency, however, affirmed the company's other ratings, consisting of the Caa3 corporate family rating, Ca-PD probability of default rating, the B3 rating on the senior secured term loan A, the Caa3 rating on the senior secured term loan B, and the C rating on the senior secured second-lien term loan.

On Tuesday, TriMark reported it entered an agreement with its lenders led by Ares Management, LP, Oaktree Capital Management, LP and Bayside Capital. The lenders will invest $350 million in cash equity, which will substantially deleverage TriMark's balance sheet. The investment is expected to close in early January, subject to closing conditions.

“Moody's expects the transaction to be a distressed exchange default upon completion because as part of the transaction, Moody's anticipates certain tranches of the existing debt will be converted to new debt and/or new equity at a discount. Moody's will append a /LD designation to the PDR upon completion of the transaction. Moody's expects that the transaction will favorably reduce debt, cash interest expense and leverage. By addressing the upcoming 2024 and 2025 maturities of all TriMark's existing debt, the transaction should also meaningfully improve the company's liquidity,” the agency said in a press release.

The outlook remains negative.

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