Moody’s prunes Hurtigruten

Moody’s Investors Service said it downgraded Hurtigruten Group AS’ bank credit facilities, comprising a €655 million backed senior secured term loan TLB and an €85 million backed senior secured term loan B1 (TLB1), to Caa3 from Caa1, its corporate family rating to Caa2 from Caa1 and its probability of default rating to Caa2-PD from Caa1-PD.

The agency affirmed the Caa1 rating of the €300 million backed senior secured notes issued by Hurtigruten's indirect subsidiary Explorer II AS but changed the outlook on both entities to negative from stable.

The downgrade reflects the elevated risk of default, along with an expectation of lower recovery to most of Hurtigruten's creditors resulting from the recapitalization plan announced Dec. 12, Moody’s said.

“Although Moody's acknowledges that the proposed transaction will ultimately strengthen the company's liquidity and balance sheet, the negative outlook signals that the rating agency will expect to consider this transaction as a distressed exchange which is a default under Moody's definitions,” the agency said in a press release.

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