Weekly Downgrade Wrap-Up
As usual, we have a week's worth of ratings actions on the debt of LBO-backed companies from ratings agencies Standard & Poor's Ratings Services and Moody's Investor Services. As has been the trend toward the end of summer, the number of downgrades has significantly fallen off. I noted last week that even the number of private equity-backed companies on S&P's "Weakest Links" list seems to have dwindled. The list represents companies that are most likely to default, and part of the reason it's shrunk may be because many of the companies have already defaulted. Is this the bottom of the default cycle? Company: Network Communications Inc. Sponsor: Citigroup Private Equity Downgrade: S&P lowered the bank loan issue-level ratings on Network Communications to 'CCC+' from 'B-'. Highlights: "The recovery rating revision reflects a change to our estimated default EBITDA and emergence valuation under our simulated default scenario," said Standard & Poor's credit analyst Jeanne Mathewson.
