PE Debt Watch (Upgrades & Downgrades)
As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies by ratings agencies Moody’s Investors Service and Standard & Poor’s. This week, in perhaps a sign of more good things to come, we’ve got three upgrades, to companies owned by SCP Private Equity Partners, Diamond Castle Holdings, and Apollo Management. Gotta love those amend & extends. Another note is that this week we learned from Moody’s that most private equity deals target a B1 rating at completion, which indicates a high leverage tolerance and relatively low default rate. So looking at these companies with the lens of B1 being ideal makes it easier to judge how far gone some of the investments may be. Or, or in the case our three upgrades from this week, of how far they’ve come.
