S&P downgrades Altegrity

Standard & Poor’s said it lowered the corporate credit rating on Altegrity Inc. to SD from CC.

The agency also said it lowered the ratings on both the $500 million senior unsecured notes and $150 million senior subordinated notes to D from C.

The downgrade follows the completion of a distressed-exchange transaction, S&P said.

The company prepaid $57 million of its $500 million of senior unsecured notes due November 2015 and exchanged $421 million into new second-lien notes due July 2020.

Also as part of the exchange, $60 million of the previous $150 million senior subordinated notes will be added to the new second-lien notes balance.

The remaining $22 million of current senior unsecured notes will be paid in accordance with current terms, S&P said. The cash interest rate remains the same on the new second-lien notes, but includes paid-in-kind interest between 2% and 2.5%, the agency said.

The company also exchanged $150 senior subordinated notes for $61 million of new third-lien notes with a 15% payment-in-kind and $60 million of the new second-lien notes. The remaining $29 million of current senior subordinated notes will be paid in accordance with current terms, S&P said.

These transactions are treated as tantamount to a default, given the current distressed financial condition of the company, the agency said.

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