- We believe there is a heightened risk that Houston-based liquid and solid
storage and transportation holding company Sprint Industrial Holdings LLC
will pursue a restructuring of its debt due in the first half of 2019 and
that debtholders will receive less than the original promise as a result.
- We lowered our issuer credit rating on Sprint Industrial by one notch to
'CCC-' from 'CCC'.
- At the same time, we lowered our issue-level ratings on the company's
first-lien credit facilities to 'CCC' from 'CCC+' and our issue-level
rating on the second-lien debt to 'C' from 'CC'.
- The negative outlook reflects the high likelihood that we would lower our
ratings if Sprint Industrial announces a debt restructuring or distressed
exchange.
CENTENNIAL (S&P Global Ratings) Dec. 13, 2018—S&P Global Ratings today took
the rating actions listed above. The downgrade reflects our expectation that
Sprint Industrial will likely undertake a debt restructuring that we classify
as distressed over the next six months. In our view, the company is highly
unlikely to refinance its first-lien credit facilities at par before maturity.
The revolving credit facility and first-lien term loan mature in February 2019
and May 2019, respectively.
The negative outlook on Sprint Industrial reflects our belief that the company
will be unable to refinance its capital structure at par and is thus likely to
pursue a distressed exchange or debt restructuring in the next six months.
We would lower our rating on Sprint Industrial if the company announces a
distressed exchange or debt restructuring or if we believe a default is a
virtual certainty.
Although highly unlikely, we could raise our ratings on Sprint Industrial if
we expect it will refinance its upcoming debt maturities at par or extend the
tenor of the loans such that lenders receive offsetting compensation that we
deem to be equivalent to the original promise.
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