S&P downgrades Travelex Holdings to ‘Selective Default’

Maria Nikolova

The downgrade reflects Travelex’s missed interest payment on its €360 million senior secured notes.

Standard & Poor’s has downgraded Travelex Holdings Ltd to ‘Selective Default’ as the FX services provider did not make the interest payment on its €360 million senior secured notes on May 15, 2020, and entered a 30-day grace period in order to seek waiver and forbearance arrangements from its lenders.

S&P says it does not believe that Travelex will make the interest payment due on the notes within the 30-day grace period. Hence, S&P cut the long-term issuer credit rating on Travelex to ‘SD’ (selective default) from ‘CC’.

S&P is also lowering its issue rating on the €360 million senior secured notes due 2022 issued by Travelex Financing PLC to ‘D’ (default) from ‘C’. The recovery rating on the notes is unchanged at ‘5’. The ‘CCC’ issue and ‘1’ recovery ratings on the £90 million super senior revolving credit facility (RCF) are unchanged too.

Let’s recall that, earlier in May, Travelex Financing Plc said it no longer intended to pay the coupon payment of €14,400,000 due on 15 May 2020 in respect of the Senior Secured Notes. The Travelex Group is intending to use its grace periods to seek appropriate waiver and/or forbearance arrangements from its Noteholders.

Travelex said back then that discussions continue on a long term solution for the group with certain of its lenders and their advisers, and with certain bondholders representing more than 66% of the outstanding face value of the Senior Secured Notes and their advisers. Travelex is also actively seeking offers for the Travelex Group from interested bidders.

As FinanceFeeds has reported, in April 2020, Travelex announced that, as part of its continuing assessment of strategic options to maximise value for its stakeholders, the Board of Travelex Holdings Limited decided to seek offers for the Travelex group.

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