S&P rates Global Medical loan, notes B-

S&P said it preliminarily rated Global Medical Response Inc.’s planned senior secured term loan due 2028 and its senior secured exchange notes due 2028 B- issue-level with 3 recovery ratings. The 3 recovery rating indicates meaningful (50%-70%; rounded estimate: 55%) recovery in default.

S&P said it also lowered its ratings for GMR and its first-lien debt to CC from CCC+. The agency does not rate the company’s second-lien debt.

GMR plans to extend the maturity on its senior secured term loan and its senior secured notes to 2028 from 2025. It will also issue new 15% payment-in-kind preferred shares and use the proceeds to repay its second-lien term due 2029.

“We view the proposed transaction as a distressed exchange where lenders will receive less than originally promised without sufficient offsetting compensation. GMR has $4.3 billion of existing senior secured debt due in 2025 with a $1.8 billion maturity within the next 12 months. Because of the upcoming paywall, we believe there is a realistic possibility of a conventional default over the next 12 months if the company is unable to successfully execute the proposed transaction,” the agency said in a press release.

The outlook is negative.

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