Bombardier Recreational Products (BRP) is trying to raise between $40 and $80 million in new capital to reduce its overall debt, the company reported in a recent release. Contributions would come from shareholders and other institutional sources.
However, as a result of BRP seeking an amendment allowing it to use new funding to repurchase debt at a discount, Standard & Poor’s (S&P) lowered BRP’s long-term corporate credit rating from B-minus to CCC-plus. Last month, S&P lowered BRP’s long-term corporate credit rating from B to B-minus.
BRP disputes S&P’s decision, saying it is based on overly rigid guidelines that do not appropriately incorporate BRP’s particular situation.
“This is not a distressed debt offer,” BRP said in the release. “The proposed amendment to allow for repurchases of a portion of its term loan at a discounted rate with new capital reflects the management’s motivation to reduce its debt levels, providing significant benefits to all stakeholders. BRP is hopeful that S&P will re-evaluate its rating when BRP demonstrates the positive results of the debt repurchases by further improving the Company’s overall credit profile.”Click here for reuse options!
Copyright 2009 Powersports Business