S&P downgrades One Call

S&P said it downgraded the long-term issuer credit rating on One Call Corp. to CC from CCC+ and placed the ratings on CreditWatch negative.

The agency also said it lowered the debt rating on the company's second-lien notes to CC from CCC- and placed the rating on CreditWatch Negative.

S&P also affirmed the CCC+ debt rating on One Call's first-lien senior secured term loan, first-lien notes and senior secured revolvers and placed the ratings on CreditWatch negative.

The recovery rating on these facilities is 3, indicating 50% to 70% expected default recovery.

S&P also said it affirmed the CCC- debt rating on the company's unsecured notes and placed the ratings on CreditWatch with negative implications.

The recovery rating is 6, indicating 0 to 10% expected default recovery.

The downgrades follow news that One Call is proposing an exchange offering for its $404 million second-lien notes due 2024.

Based on the terms, S&P said it views the proposed transaction as a distressed exchange tantamount to a default because noteholders are receiving less than they were originally promised.

This exchange is not purely opportunistic because the agency said it believes One Call's non-payment and default risk without the transaction are elevated over the next 12 months because of underperformance and very tight liquidity, the agency said.

The CreditWatch negative means that S&P will likely downgrade One Call to SD (selective default) if the exchange is completed.

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