S&P cuts CHC, loan, notes

Standard & Poor's said it lowered its long-term corporate credit rating on CHC Group Ltd. to D (default) from CCC.

At the same time, the agency lowered its issue-level rating on subsidiary CHC Helicopter SA's super senior revolving credit facility to D from B-. The 1 recovery rating is unchanged and indicates an expectation of very high (90%-100%) recovery in a default scenario.

S&P also downgraded its issue-level rating on CHC Helicopter's senior secured notes to D from CCC. The recovery rating on these notes is unchanged at 4, which reflects an expectation of average (30%-50%; lower half of the range) recovery in default.

Finally, the agency downgraded its issue-level rating on the subsidiary's unsecured debt to D from CCC-; the recovery rating on these notes is unchanged at 5, indicating an expectation of modest (10%-30%; lower half of the range) recovery in a default scenario.

"The downgrade reflects CHC's decision to skip an interest payment on its 9¼% senior secured notes due Oct. 15, 2020, and our belief that the company will not make this payment before the 30-day grace period ends," S&P credit analyst Madhav Hari said in a news release.

"We anticipate that the company will likely restructure its debt under bankruptcy protection or a similar scenario."

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