Weekly Downgrade Wrap-Up: Where Does Portfolio Company Debt Stand?
As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies. This week we finally say goodbye to Chrysler once and for all, as the company emerges from bankruptcy and Cerberus officially loses its investment. Meanwhile, auto parts maker Dana Corp., backed by Centerbridge Capital, was downgraded and, in a curious twist, Harrah’s was upgraded. Despite the excitement around Harrahs’ successful debt offering, I’m not rushing to remove it from the “Top Ten Worst Deals of 2008” list yet. Company: Dana Holding Corporation Sponsor: Centerbridge Capital Partners LP Downgrade: Moody’s lowered the company’s corporate family rating to Caa2 and its probability of default rating to Caa1. Highlights: “On May 8, 2009, Dana commenced a tender offer for a portion of its outstanding senior secured term loan at a deep discount to par value. The company's PDR and the rating on the term loan were adjusted to Ca at that time to reflect the potential for loss to investors. With the passage of time since the May 12 target date for concluding the tender, Moody's has now repositioned the PDR at Caa1.”
