Optiv Inc. Downgraded To 'SD' From 'CCC+' On Distressed Debt Exchange; Second-Lien Rating Lowered To 'D'

  • Optiv Inc. recently completed a second-lien debt exchange transaction that S&P Global Ratings deems a distressed exchange. The company repurchased about $47 million of second-lien debt for about $23 million of cash, which represents more than 50% discount to face value.
  • We are lowering our issuer credit rating on Optiv to 'SD' (selective default) from 'CCC+'.
  • We are also lowering our issue-level rating on the company's initial $230 million of second-lien term loan to 'D' from 'CCC-'.
  • We are placing our 'CCC+' issue-level rating on the company's initial $800 million of first-lien term loan on CreditWatch with negative implications.
SAN FRANCISCO (S&P Global Ratings) March 27, 2020—S&P Global Ratings today took the rating actions listed above. The downgrade follows the exchange transaction, which Optiv executed in the fourth quarter of last year, in which it repurchased about $47 million of second-lien debt for about $23 million of cash, representing more than 50% discount to face value. As of this writing, the second-lien debt continues to trade at a significant discount to par. The company has drawn on a portion of its asset backed revolver (ABL) and has adequate liquidity, through about $80 million of balance sheet cash and just under $100 million of availability on its ABL.
Over the coming days, we will reassess our issuer credit rating on Optiv. Following the exchange, Optiv's credit metrics would look marginally better because it now has less total debt in its capital structure.

We could revise our issuer credit rating and issue-level ratings on both the first- and second-lien debt following our upcoming review.
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