Weekly Downgrade Wrap-Up
As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies from S&P and Moody’s Investors Service. This week was a busy one for downgrades and debt exchanges, with eight downgrades and one upgrade. Company: Energy Future Holdings Corp. Sponsor: Kohlberg Kravis Roberts & Co. Action: S&P raised its corporate credit rating on EFH and its unregulated subsidiaries TCEH and EFCH to 'B-' from 'SD' and assigned a 'B–' corporate credit rating to EFIH. This rating action follows EFH's recent announcement that it and its subsidiaries have completed the exchange of its $357 million of various securities within the entire capital structure. Highlight: “These ratings reflect EFH's consolidated creditworthiness post-exchange.” The outlook on these corporate credit ratings is negative, reflecting weak financials and increasing refinance risk.
