S&P lowers K&N Parent to D

S&P said it lowered its issuer credit rating on K&N Parent Inc. to D from CCC.

At the same time, S&P lowered the issue-level rating on its first-lien term loan to D from CCC and the issue-level rating on its second-lien term loan to D from CC.

K&N recently issued a $10 million bridge loan facility and extended the grace period on missed fiscal third-quarter 2022 debt payments to Oct. 31, 2022. This transaction primes some existing first- and second-lien debtholders.

“We believe this transaction is tantamount to a default on the existing first- and second-lien term loans because their rankings have been altered to more junior collateral positions. It was completed due to the company's distressed operations as it was unable to meet required payments with internally generated cash flow,” S&P said in a news release.

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