medium · Corporate Credit Analysis distressed
A borrower, BlueStone Logistics, is unable to meet a near-term principal repayment of $50M. It proposes to creditors an exchange where they receive a new $45M note with a 2-year maturity extension and a coupon reduction from 8% to 5%.
If the creditors accept this to avoid a total payment default, how would a rating agency categorize this event?
- Technical Default
- Distressed Debt Exchange (DDE)
- Covenant Waiver
- Voluntary Refinancing
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