S&P downgrades Travelex to ‘Default’, then withdraws ratings at the company’s request

Maria Nikolova

S&P lowered its long-term issuer credit rating on Travelex to ‘D’ (default) from ‘SD’ (selective default).

S&P Global Ratings said on Monday that it lowered its long-term issuer credit rating on Travelex Holdings Ltd. (Travelex) to ‘D’ (default) from ‘SD’ (selective default) on the completion of a debt restructuring.

S&P also lowered its issue rating on the £90 million revolving credit facility (RCF) to ‘D’ from ‘CCC’. The issue rating on the €360 million senior secured notes remained unchanged at ‘D’.

S&P subsequently withdrew all its ratings on Travelex at the issuer’s request.

On Aug. 6, 2020, the UK-based currency-exchange service provider announced that it has completed the restructuring of its debt obligations, including the write-off of £225 million of debt and the amendment of the original terms of its revolving credit facility (RCF). As part of the restructuring, Travelex wrote off about two-thirds of its debt, reducing the outstanding amount to £160 million from £385 million. Travelex also amended the original terms of its RCF and reinstated it as a term loan.

S&P views this reinstatement as a distressed exchange and therefore, tantamount to a default under its criteria.

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