Moody’s downgrades Consolidated Minerals

Moody's Investors Service said it downgraded the corporate family rating of Consolidated Minerals Ltd. to Ca from Caa1 and its probability of default rating to Ca-PD/LD from Caa1-PD.

The agency also said it downgraded the rating on the company’s $400 million senior secured notes due in 2020 to Ca from Caa1.

The outlook is negative.

The downgrades follow a renegotiation of payment terms with bondholders effective June 14, which constitutes a distressed-debt exchange and a default event under the agency’s criteria.

The company's rearrangement of payment terms with its bondholders is considered a distressed exchange, Moody’s said.

There will be a diminished financial obligation to bondholders when compared to the original payment promise for the notes, which constitutes a default, the agency added.

The downgrades also consider an uncertainty over the evolution of the manganese price and a linked concern that the company could face pressures again beyond 2018 in meeting its payment obligations to noteholders, Moody’s said.

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