S&P had this to say about the 2007 Goldman Sachs and Onex Partners LBO:
Hawker Beechcraft announced a tender offer to purchase a portion of its
unsecured notes at values substantially below par.
- Under our criteria, this is a distressed buyback which we view as a
partial restructuring and, accordingly, tantamount to a default.
- We are lowering our corporate credit rating to "CC" from "B-" and placing
it on CreditWatch with negative.
- We expect to lower the corporate credit rating to SD (Selective Default)
and the issue-level rating on the notes to "D" on May 18, 2009, the early tender
date.
"The downgrades follow the company's announcement that it is offering to
purchase for cash a portion of its senior fixed-rate notes due 2015, senior PIK
election notes due 2015, and subordinated notes due 2007 at values substantially
below par for an aggregate purchase price of up to $100 million," said Standard
& Poor's credit analyst Roman Szuper. The secured debt is not affected by
the tender offer, which expires on 2 June, 2009.
With rolling SD downgrades becoming the norm, the impact on the holdings of whatever remaining CDOs are left will only get more pronounced as forced selling picks up again per the ratings agencies' methodology of putting virtually any company that attempts a coercive subpar debt exchange. Sphere: Related Content
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