Moody's assigns Caa2 to OSG Group

Moody's Investors Service said it assigned ratings to OSG Group Holdings, Inc. following its emergence from bankruptcy. The agency assigned OSG a Caa2 corporate family rating and a Caa2-PD probability of default rating, as well as a Caa1 rating to the amended and extended senior secured first-lien credit facility at wholly owned borrower entity Output Services Group, Inc.

The credit facility was amended on Aug. 30 to, among other things, extend the maturities on the revolver and term loan debt to June 2025 and June 2026, respectively. The amendment also increased the interest rate on the first-lien facilities and allows for a portion to be paid in kind.

“The assignments reflect Moody's view that weak operating performance will persist, leading to sustained free cash flow deficits and very high debt to EBITDA above 8x through the end of 2023. Despite the $134 million or roughly 16% reduction of funded debt following the bankruptcy reorganization, Moody's views that absent additional debt reduction or significant EBITDA expansion, OSG's capital structure remains at elevated risk for potential future debt restructuring,” the agency said in a press release.

The outlook is stable.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.