DBRS has announced that it:
has today downgraded Yellow Media Inc.’s (Yellow Media or the Company) Issuer Rating to CCC from B (low); its Medium-Term Notes rating to CCC from B (low), with an RR4 recovery rating; and its Exchangeable Subordinated Debentures to CC (high) from CCC, with an RR6 recovery rating. The trend on all ratings remains Negative.
DBRS notes that Yellow Media’s unsecured debt continues to have average recovery prospects (RR4; 30% to 50% expected recovery), while its subordinated debt has poor recovery prospects (RR6; 0% to 10% expected recovery) under a base case default/recovery scenario.
The decline in Yellow Media’s print revenue continues and is expected to be even more rapid and enduring than previously anticipated. The Q1 2012 results support this view and the trend is expected to continue. As such, Yellow Media performed an asset impairment test in relation to its most recent results and trends and recorded a goodwill impairment charge of $3 billion.
The reduced expectations for revenue, operating income and cash flow, combined with the Company’s first scheduled debt maturity in February 2013, leads DBRS to believe that the likelihood that Yellow Media’s financing activities in 2012 will involve some form of compromise for existing creditors has increased further than anticipated in the previous rating action on April 2, 2012. The Negative trend reflects the likelihood that Yellow Media’s ratings will be further downgraded with the passage of time or in the event that the Company pursues some form of recapitalization.
Yellow Media has the following issues of preferred shares outstanding: YLO.PR.A and YLO.PR.B (both retractible and both convertible into common at the company’s option, on terms that may now be considered onerous); and YLO.PR.C and YLO.PR.D (both FixedResets without the company having a conversion option).
These issues were last mentioned on PrefBlog when S&P downgraded debt to CCC; preferreds to D. These issues are all tracked by HIMIPref™ but are assigned to the Scraps index on credit concerns.
This entry was posted on Tuesday, May 29th, 2012 at 9:20 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed.
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YLO: DBRS Downgrades Debt to CCC
DBRS has announced that it:
Yellow Media has the following issues of preferred shares outstanding: YLO.PR.A and YLO.PR.B (both retractible and both convertible into common at the company’s option, on terms that may now be considered onerous); and YLO.PR.C and YLO.PR.D (both FixedResets without the company having a conversion option).
These issues were last mentioned on PrefBlog when S&P downgraded debt to CCC; preferreds to D. These issues are all tracked by HIMIPref™ but are assigned to the Scraps index on credit concerns.
This entry was posted on Tuesday, May 29th, 2012 at 9:20 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.