Standard & Poor's lowers BRP rating

Author:
Updated:
Original:

Standard & Poor's lowered its ratings on Bombardier Recreational Products from B-minus to CCC-plus.

The ratings agency said it reduced the rating because of BRP's plan to buy back up to $250 million of its term debt at a discount, according to a recent report in the Canadian Press. S&P said it believes bondholders would only accept a substantial discount if they have doubts about receiving full payment on obligations, even though the term debt is secured.

BRP says it is trying to raise between $40 million and $80 million of new capital to reduce its overall debt. The company said in a statement that this "is not a distressed debt offer" and that S&P's decision "is based on overly rigid guidelines that do not appropriately incorporate BRP's particular situation."

Last month, S&P lowered BRP's long-term corporate credit rating to B-minus from B. S&P also lowered the company's rating on the $790 million (U.S.) senior secured term loan due 2013 to B-minus from B.

Standard & Poor's issues ratings from AAA, the highest, to D, which means payment is in default.

Click here for the full release.

Related

‘We’ve been working our butts off’

With his boatbuilding pedigree, 28-year-old Philip Faulkner launched Avid Boats in just six months. The startup has a facility, financial backing, boats on the line and big plans going forward.