S&P drops Syncreon Group

S&P said it downgraded Syncreon Group Holdings BV to SD from CC and dropped the rating on all the company’s exchanged senior secured debt claims to D (default) from CC, and its recovery rating to 4 from 3.

In addition, the agency cut the rating on Syncreon’s senior unsecured notes to D from C; the 6 recovery rating is unchanged.

“The downgrade follows Syncreon’s announced exchange of its existing senior secured debt. This includes changing approximately $570 million under its term loans due 2020 and 2021 and $109 million under its payment-in-kind revolving credit facility due 2020, into a $225 million first-lien, second-out senior secured term loan, and 80% of the company’s reorganized equity,” said S&P in a news release.

The company also exchanged $225 million unsecured notes due 2021 for 4.5% of reorganized equity, 10% warrants of reorganized equity, and an additional 2.5% of reorganized equity to noteholders that agreed to the terms three days before the proceeding’s convening hearing, S&P said.

Syncreon issued a $125.5 million first-lien, first-out senior secured term loan, converting liquidity loans from an ad hoc group of secured lenders and the added drawdown of their backstopped loan commitments, the agency said.

“We expect to raise the issuer credit rating over the next few days to reflect Syncreon’s revised capital structure. We expect to assign ratings to the proposed senior secured term loans over the coming days,” S&P said.

Syncreon repaid the borrowings under the asset-backed lending facility. The company is getting a new ABL facility.

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