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Moody’s cuts AAC Holdings
Moody’s Investors Service said it downgraded the probability of default rating of AAC Holdings, Inc. to D-PD from Caa2-PD. The rating agency affirmed AAC’s Caa2 corporate family rating and the Caa2 ratings on its senior secured credit facilities. There is no change to the SGL-4 speculative grade liquidity rating. The outlook remains negative.
The downgrade of the PDR reflects AAC’s missed principal and interest payments due during the third quarter ended Sept. 30, which Moody’s said it considers a default. AAC entered forbearance agreements with its lenders that expire on March 31. The affirmation of the Caa2 CFR reflects the potential for future defaults by AAC over the next 12-24 months. The affirmation of the Caa2 senior secured debt ratings indicates Moody’s view that AAC’s real estate portfolio boosts the recovery prospects for the senior secured debtholders in a default scenario, the agency said.
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