S&P lowers CHC Group, CHC Helicopter

Standard & Poor's said it lowered its long-term corporate credit rating on CHC Group Ltd. to CCC from B.

The outlook is negative.

At the same time, the agency lowered its issue-level rating on CHC Helicopter SA's super senior revolving credit facility to B- from BB-. The 1 recovery rating is unchanged and indicates an expectation of very high (90%-100%) recovery in a default scenario.

S&P also lowered its issue-level rating on CHC Helicopter's senior secured notes to CCC from B. The recovery rating is unchanged at 4; however, the agency now expects recovery at the lower half of average (30%-50%) rather than at the upper half as expected previously.

Finally, S&P lowered its issue-level rating on the subsidiary's unsecured debt to CCC- from B-. The recovery rating is unchanged at 5, indicating an expectation of modest (10%-30%; lower half of the range) recovery in a default scenario.

"We base the downgrade on the increased likelihood that the company could default on its debt within the next 12 months," S&P credit analyst David Fisher said in a news release.

The downgrade follows CHC's announcement that it hired advisors to explore various alternatives for the company's capital structure, including a possible debt restructuring, and that CHC has drawn down its revolving credit facility to the borrowing limit.

The agency views these events as a likely prelude to a debt exchange or debt restructuring, which it would characterize as a default, within the next 12 months.

© 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.