Weekly Downgrade Wrap-Up (13, Including A Rebellious S&P Rating)
As usual, we have a week of ratings downgrades on the debt of LBO-backed companies, via ratings agencies Moody’s and Standard & Poor’s. This week we have thirteen. One Note: This list excludes downgrades to ‘D’ for ‘default’ on companies that have filed for Chapter 11 bankruptcy protection. Check the quarterly LBO-backed bankruptcy list for those. However, it does include defaults and ‘SD,’ or ‘selective defaults’ on companies that have not yet filed for bankruptcy. I say this because this list is becoming just as much a way to track distressed debt exchanges as it is to track ratings downgrades. We also have a rebellious ratings agency first (at least in my experience). The story is this: Similar to public company analysts, debt-laden companies pay ratings agencies to examine and report on their debt. Sometimes, when a company’s ratings get too ugly, a company will ask the agency to withdraw its rating, and S&P or Moody’s will oblige. Such is the case with Six Flags, except instead of hiding its analysis from the public, S&P issued its first ever (to my knowledge) “unsolicited” rating on the company. Way to take on the man, S&P.
