S&P cuts KCIBT

S&P said it cut KCIBT Holdings LP’s issuer rating to SD from CCC and the ratings on its first- and second-lien term loans due 2025 to D from CCC and CC, respectively.

The downgrade follows the company's amendments to its first- and second-lien term loans, which allow it to partially pay-in-kind interest on the first-lien loan until March 31, 2023, and waive interest payments due on the second-lien loan until at least March 31, 2023.

The company also extended the maturity date of the first-lien facility to June 1, 2025, and the maturity date of the second-lien term loan to Dec. 1, 2025.

The agency said it considers the amendments as equivalent to a default because the lenders will get less than they were originally promised.

“Given the steep declines in the company's revenue stemming from the Covid-19 pandemic's effects on global travel volumes and our expectation that the demand for business travel will remain well below pre-pandemic levels for a number of years, we view the amendment as distressed rather than opportunistic,” S&P said in a press release.

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