Moody's drops Primus

Moody's Investors Service said it revised Primus Telecommunications Group, Inc.'s probability of default rating to Caa3/LD from Caa3 in response to the company's announcement of a distressed debt exchange in which Primus issued $67.1 million of new debt instruments and paid $4.7 million in cash to retire $130.3 million of existing outstanding debt.

The agency said that the rating will be revised back to Caa3 after three business days.

The rating action results from Moody's practice of interpreting circumstances in which a debt holder accepts a compromise offering of less than 100% of face value as constituting a default, hence the "/LD" component of the PDR to signal the "limited default" that has been deemed to have occurred on the exchanged securities.

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