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S&P upgrades One Call
S&P said it raised the long-term issuer credit rating on One Call Corp. to CCC from SD (selective default).
One Call has completed debt-exchanges on its first-lien term loan, first-lien notes and second-lien notes.
The agency also said it raised the debt ratings on the company's first-lien notes due 2024 to CCC from D and its first-lien term loan due 2020 to CCC from CC.
S&P also lowered the debt rating on the company's first-lien revolver due 2020 to CCC from CCC+, along with the debt rating on the company's first-lien term loans due 2022 to D from CC.
Immediately afterward, the agency said it raised the ratings on these issues to CCC.
The recovery rating on the company's senior secured first-lien facilities remains at 3, indicating 50% to 70% expected default recovery.
S&P also said it raised the debt ratings on the company's second-lien notes due 2024 to CC from D and lowered the debt ratings on the company's senior unsecured notes due 2021 to CC from CCC-.
The recovery rating on these issues remains at 6, indicating 0 to 10% expected default recovery.
The upgrade follows a review of the company's credit profile subsequent to the exchanges, the agency explained.
The outlook is negative.
Between these two transactions, both of which are viewed as distressed exchanges, the company has replaced $145 million of 7½% first-lien notes due 2024, $113 million of 10% second-lien notes due 2024 and $104 million of Libor plus 5¼% first-lien term loan due 2022 with $339 million of new first-lien PIK toggle notes due 2024.
The ratings reflect a view that although the completed exchanges alleviate about $30 million of annual cash interest requirements, the company remains susceptible to a default over the next 12 months given its weakened performance and liquidity, highly elevated leverage levels and tight financial covenant, S&P said.
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