S&P: Rapsod Trade (Gallery Media) Downgraded To 'D' On Nonpayment Of Interest On Its Senior Secured Notes
May 18, 2009 "Standard & Poor's"
PARIS (Standard & Poor's) May 15, 2009--Standard & Poor's Ratings Services said today that it has lowered its long-term corporate credit and debt ratings on Russian outdoor advertising group Rapsod Trade Ltd. (Gallery Media) to 'D' from 'CC'.
At Dec. 31, 2008, Gallery Media had gross on-balance-sheet debt of about $278 million.
The downgrade follows Gallery Media's announcement today that it has decided to postpone the $8.9 million interest payment due today on its senior secured notes due 2013, in order to preserve cash. While the group has announced that it will shortly begin restructuring negotiations with its lenders with the help of recently appointed advisors, we believe it is unlikely that the group will make the missed interest payment ahead of the end of the 30-day grace period.
In addition, a debt restructuring of the group is highly likely to result in a distressed exchange offer in the short term, in our opinion, and encompass both senior and junior creditors. The group's main debt facilities are $175 million of senior secured notes, of which about $161 million are left outstanding, and $100 million of payment-in-kind (PIK) notes, both due in 2013.
Company — Gallery Media
Full nameGallery Media Holding Ltd. BVI (Gallery)
Registration countryVirgin Islands, British