On October 20, 2017, Concordia International Corp. announced that it has taken a further step in its previously announced efforts to realign its capital structure by commencing a court proceeding under the Canada Business Corporations Act, which is a Canadian corporate statute allowing Canadian corporations to restructure certain debt obligations. The CBCA is not a bankruptcy or insolvency statute.
On October 17, 2017, S&P Global Ratings lowered its corporate credit rating on Concordia International Corp. to SD from CCC- and its $735 million in senior unsecured notes to D from C. According to S&P Global, the downgrade follows Concordia International’s announcement that it failed to make the October 16, 2016, interest payment on the 7% senior unsecured notes due 2023. Given S&P’s view of the Company’s debt level as unsustainable and ongoing restructuring discussions, they do not expect the Company to make a payment within the grace period.
On October 16, 2017, Concordia International Corp. announced that in conjunction with its ongoing efforts to realign its capital structure, it has decided to use a 30-day grace period to defer the payment of approximately $26 million of interest due on its $735 million unsecured notes. The deferral of the interest payment does not result in an Event of Default until the expiry of the 30-day grace period. Read more on distressed companies.