Standard & Poor’s lowered its corporate credit rating on CEVA Logistics from “B minus” to “SD” — Selective Default — just days after the UK-based logistics company pulled a planned $400 million initial public offering.
CEVA’s secured notes due 2018 and unsecured notes due2020 were also downgraded to “D” — default — from “CCC plus.”
Standard & Poor’s said there is a risk CEVA could file for bankruptcy if it does not receive the necessary consent from its note holders to implement a refinancing plan.
Standard & Poor’s said the downgrades reflect its understanding that that CEVA has missed its scheduled interest payment due April 1, on 532 million euros ($686 million) on secured notes due 2018 and 470 million euros ($606 million) due 2020.
“CEVA has failed to pay one or more of its financial obligations in full when it was due, and under our criteria we consider this tantamount to a default,” the ratings agency said.
CEVA last week announced a debt-to-equity swap with bondholders that will reduce its consolidated net debt by 1.2 billion euros.
“We understand that CEVA has commenced private exchange offers and consent solicitation for certain outstanding debt securities in connection with the restructuring plan,” Standard & Poor’s said.
“We consider an exchange offer as distressed and tantamount to a default if we believe that the investors will receive less value than the promise of the original securities.”
CEVA Logistics, which is owned by Apollo Global Management, a U.S. private equity fund, withdrew plans for an IPO in New York in May, citing unfavorable financial performance that would adversely affect the offering.