Rating Action:
Moody's places Eletson in limited default; corporate family rating at Ca
04 Mar 2019
London, 04 March 2019 -- Moody's Investors Service, ("Moody's") has today affirmed Eletson Holdings Inc.'s (Eletson) corporate family rating (CFR) and senior secured rating on the $300 million notes at Ca. At the same time, Moody's has revised the company's probability of default rating (PDR) to Ca-PD/LD from Ca-PD. The rating outlook remains negative.
Moody's views the non-payment of interest due on the senior secured notes on 15th January 2019, after considering the grace period of 30 days, as a missed payment default and hence the PDR is appended with the "/LD" (limited default) designation, which will remain until the company resolves the missed payment. Moody's views this as a limited default as it represents a default of approximately 30% of the company's capital structure. The affirmation of the CFR and the senior notes ratings reflects tight liquidity, weak operating environment and increased risk of a distressed exchange.
This rating action follows the company's announcement on 25 January 2019 that it has entered into a Forbearance Agreement with at least 90% of the holders of its 9.625% First Preferred Ship Mortgage notes due 2022