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S&P cuts Owl Finance Ltd.
S&P said it downgraded Owl Finance Ltd., the parent of Yell, and its notes, issued by Yell Bondco plc, to CC from CCC. The agency also lowered the super senior revolving credit facility issued by Yell Ltd. to CCC from B-.
Owl Finance agreed in principle with 97% of its bondholders to exchange its £225 million, with £214 million outstanding, of senior secured notes for £65 million of 8 ¾% new notes due 2027 and 95% of equity in its parent company, Yell Holdco Ltd.
“We view the proposed transaction as distressed in line with our criteria and, if completed, tantamount to a default because we think the noteholders will receive less than they were originally promised and because, absent the proposed transaction, we view the company's capital structure as unsustainable,” S&P said in press release.
However, the agency said Owl Finance has enough cash on its balance sheet to make the payment due in March, but will probably get a waiver and not make the payment because of the planned exchange.
The outlook is negative.
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