S&P cuts EyeCare Partners

S&P said it downgraded EyeCare Partners LLC’s issuer credit rating to SD, Selective Default, from CCC and withdrew its rating on the company's revolver, which was repaid and terminated through a private discount-to-par debt exchange. The new debt financing includes a $200 million revolver due 2028.

The agency also lowered the issue-level rating on the company's second-lien term loan due 2028 to D, or default, from CC and existing first-lien term loans to CC from CCC. S&P said it placed these ratings on CreditWatch with negative implications, reflecting an expectation that it will downgrade these ratings to D once it confirms which specific debt issues have participated in the transaction.

“We consider this transaction to be a distressed exchange because of its cash to paid-in-kind interest conversion, debt discount capture, extended maturities, and lower priority given the addition of a new super-priority term loan. Each of these factors lead us to view the transaction as distressed because the debt investors did not receive the originally promised principal amount or adequate compensation for changes to the capital structure,” S&P said in a press release.

Once all the transactions are completed the agency said it will reassess EyeCare’s issuer rating.

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