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S&P cuts Peabody Energy
S&P said it lowered its ratings for Peabody Energy Corp. to SD from CC and its 2022 notes to D from CC.
The downgrade follows Peabody’s completion of an exchange offer for its 2022 notes S&P viewed as a distressed debt exchange and equivalent to default, the agency said.
The nonparticipating lenders of the 2022 notes now rank junior to the lenders that exchanged their notes in Peabody’s capital structure. “As such, the nonparticipating lenders will be stripped of the collateral securing their notes, which will become unsecured obligations of the company. The nonparticipating lenders represent about 13.1% of the 2022 notes, which we deem to be a material amount of the notes outstanding, based on the final tender results,” S&P said.
The agency said it does not view the revolver exchange as distressed.
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