S&P hits Healogics

S&P said it downgraded CDRH Parent Inc. (Healogics Inc.) to CC from CCC- on an exchange offer the agency considers distressed.

Healogics plans to refinance its capital structure by exchanging a portion of the principal outstanding under its first-lien credit facilities to preferred equity, while repaying the remaining balance with new debt. The company also wants to exchange the principal outstanding under its second-lien term loan facility with common equity, the agency said.

“In both instruments, we view the proposed debt-for-equity transaction as distressed and, if completed, tantamount to a default. This is because we believe the first-lien and second-lien lenders will receive less than they were originally promised due in part to the junior ranking of the equity being offered,” S&P said in a press release.

The agency also placed all its Healogics ratings on CreditWatch with negative implications. If the company completes the exchanges, S&P said it would likely cut Healogics’ rating to D.

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