Moody's: Petrol Caa3/LD probability of default

Moody's Investors Service said it assigned a Caa3/LD probability of default rating to Petrol AD following the company's recent disclosure that it repurchased €26.6 million face value of its €100 million of senior guaranteed bonds due Oct. 26 at a substantial discount to par during the first quarter of 2011.

The open market transaction constitutes a distressed exchange and a limited default, the agency said. The LD designation signifies a limited default and also incorporates the possibility of additional open market transactions at substantial discounts to par over the next three months.

The open market transaction has helped reduce Petrol's overall debt load and the repayment risk associated with its bonds due Oct. 26, the agency noted. However, it does not solve the immediate liquidity pressure, which the company is facing as a result of its reliance on securing a new bank credit facility in order to refinance the balance of €75 million still outstanding under the bond issue.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.