S&P drops Boart Longyear to SD

S&P said it lowered its rating on Boart Longyear Ltd. to SD from CC and the rating on its senior secured notes to D from CC. The unsecured notes are rated C with a 6 recovery rating.

The downgrade follows the company’s conversion of the June and December interest payments due on its senior secured notes to pay-in-kind interest from cash interest, S&P said. The company will pay 12% and 14½% PIK interest in June and December, respectively, rather than the previous 10% rate.

“While these payments will have a higher interest rate, we consider this modification a selective default since investors are receiving less than they were originally promised under the security, partly because the amendment will delay the timing of the interest payments,” S&P said in a press release.

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