absolutely, ratings agencies were paid by the issuer so they had an incentive to rate the credit too highly, not to undervalue them. Full statement:
Sydney, July 31, 2017 -- Moody's Investors Service has downgraded Quintis Limited's corporate family rating (CFR) and senior secured debt rating to Ca from Caa1. The ratings remain on review for downgrade.
RATINGS RATIONALE
"The downgrade follows the company's announcement on 31 July 2017 that it does not expect to make a bi-annual interest payment of USD10.9 million due on 1 August 2017," says Shawn Xiong, a Moody's Analyst.
Quintis has until 30 August 2017 to either make the USD10.9 million interest payment or receive a waiver.
The company remains in discussions with noteholders as well as other external parties in relation to potential debt and equity transactions that would have the effect of achieving a recapitalization of the company.
Quintis has also requested another extension of the voluntary suspension of its securities on the Australian Stock Exchange until 1 September 2017.
The ratings remain under review for downgrade, reflecting the continued uncertainty surrounding Quintis' capital recapitalization plan, as well as the potential exercise of a put option by an institutional plantation owner.
The outlook on Quintis' CFR could return to stable if concrete details materialize in regard to the recapitalization plan and the exercise of the put option.
Quintis' ratings could be downgraded if a successful recapitalization does not occur and/or the put option is exercised and the company is unable to make the payments under the put option.
It is unlikely that Quintis' ratings would be upgraded in the medium term. The company needs to successfully recapitalize and demonstrate a consistent operating track record before any upgrade can be considered.
QIN Price at posting:
29.5¢ Sentiment: Sell Disclosure: Not Held
