On July 5, 2016, S&P Global Ratings lowered its corporate credit rating on MD America Energy, LLC (MDAE) to SD from CCC and its term loan rating to D from CCC. “The downgrade reflects MDAE’s announcement that it is redeeming its term loan due 2019 at 94% to par with proceeds from an equity infusion from its parent company Meidu Energy Corp.,” said S&P Global Ratings credit analyst Christine Besset. “We view the transaction as distressed because debtholders will receive less than par, and because we believe that MDAE’s leverage was unsustainable given our expectation of deteriorating cash flow generation,” she added. According to S&P Global, its analysis will incorporate the absence of debt of the Company, while still taking into account the small size and scale of its asset base, the challenging operating environment and the likelihood of potential acquisitions and releveraging in the next 12 months. Read more on distressed companies.
About Kerry Mastroianni
Kerry Mastroianni, the editor of The Distressed Company Alert, has been researching distressed and bankrupt companies for over 18 years. As a 10-year employee of New Generation Research, she is also a data editor for Bankruptcy Week and the editor for our annual Bankruptcy Yearbook & Almanac. Prior to Kerry’s employment at NGR, she worked for eight years as a research analyst for KPMG’s corporate recovery practice.