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\t\t<\/span><\/p>\n <\/span><\/p>\n \n \t\t\u00a9 Thomson Reuters 2012 All rights reserved<\/p>\n","protected":false},"excerpt":{"rendered":" Overview — South-Africa based recycler New Reclamation Group Pty Ltd. (Reclam) recently announced that between April and October 2012, it acquired 24% of its outstanding secured notes in the open market at a significant discount of about 25%. — We consider that these buybacks constitute a distressed exchange because of Reclam’s weak liquidity and our […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[830,2370,183],"class_list":{"0":"post-16482","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-news","8":"tag-reuters","9":"tag-south-africa-2","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/16482","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=16482"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/16482\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=16482"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=16482"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=16482"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Overview\n -- South-Africa based recycler New Reclamation Group Pty Ltd. (Reclam) \nrecently announced that between April and October 2012, it acquired 24% of its \noutstanding secured notes in the open market at a significant discount of \nabout 25%.\n -- We consider that these buybacks constitute a distressed exchange \nbecause of Reclam's weak liquidity and our uncertainty over its ability to \nrepay the notes by the time they mature on Feb. 1, 2013.\n -- We are therefore lowering our long-term corporate credit rating on \nReclam to 'SD' (selective default) from 'CCC-'.\n -- We are also lowering our issue rating on Reclam's EUR116 million secured\nnotes to 'D' (default) from 'CCC-'. \n\nRating Action\nOn Nov. 7, 2012, Standard Poor's Ratings Services lowered to 'SD' (selective \ndefault) from 'CCC-' its long-term corporate credit rating on South-Africa \nbased recycler New Reclamation Group Pty Ltd. (Reclam). \n\nAt the same time, we lowered our issue rating on the company's EUR116 million \nsecured notes (previously EUR153 million) to 'D' (default) from 'CCC-'. The \nrecovery rating on the secured notes remains unchanged at '4', indicating our \nexpectation of average (30%-50%) recovery in the event of a payment default.\n\nRationale\nThe downgrades reflect Reclam's recent announcement that between April and \nOctober 2012, it acquired 24% of its outstanding secured notes in the open \nmarket at a significant discount of about 25%. We do not consider the buybacks \nto be opportunistic, but rather to constitute a distressed exchange, because \nof the company's weak liquidity and our uncertainty over its ability to repay \nthe notes by the time they mature on Feb. 1, 2013. In addition, we understand \nthat management could continue to buy back further notes in the coming weeks. \n\nDuring its public investor call, management mentioned that the buybacks were \nfunded by internally generated cash and unsecured borrowings with a maturity \nprofile that extends beyond the maturity of the notes and is not conditional \non the conclusion of any other refinancing. We find this disclosure to be \npoor, and as not providing the essential information we need to fully \nunderstand the current situation. \n\nIn light of the possibility of further buybacks, we do not envisage raising \nthe 'D' rating on the secured notes. We will re-evaluate the corporate credit \nrating in the near term, but based on the information we have at the moment, \nwe do not expect to raise it above 'CCC-'. The 'CCC-' rating would reflect our \nview of the risks associated with Reclam refinancing the notes and our \nuncertainty over whether the group will change its capital structure before \nthe notes mature.\n\nFor further details on our previous rating actions on Reclam, see \"South \nAfrica-Based Recycler The New Reclamation Group Downgraded To 'CCC-' On \nRefinancing Risk; Off Watch; Outlook Neg,\" published June 29, 2012, on \nRatingsDirect on the Global Credit Portal. For an explanation of our approach \nto distressed exchange offers, see \"Rating Implications Of Exchange Offers And \nSimilar Restructurings, Update,\" published May 12, 2009.\n\nRelated Criteria And Research\nAll articles listed below are available on RatingsDirect on the Global Credit \nPortal, unless otherwise stated.\n -- Criteria For Assigning 'CCC+', 'CCC', 'CCC-', And 'CC' Ratings, Oct. \n1, 2012\n -- South Africa-Based Recycler The New Reclamation Group Downgraded To \n'CCC-' On Refinancing Risk; Off Watch; Outlook Neg, June 29, 2012\n -- Methodology And Assumptions: Liquidity Descriptors For Global \nCorporate Issuers, Sept. 28, 2011\n -- Key Credit Factors: Methodology And Assumptions On Risks In The Metals \nIndustry, June 22, 2009\n -- Rating Implications Of Exchange Offers And Similar Restructurings, \nUpdate, May 12, 2009\n -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008\n\nRatings List\nDowngraded\n To From\nNew Reclamation Group Pty Ltd.\nCorporate Credit Rating SD CCC-\/Negative\n Secured Debt D CCC-\n Recovery Rating 4 4\n\n\nComplete ratings information is available to subscribers of RatingsDirect on \nthe Global Credit Portal at www.globalcreditportal.com. All ratings affected \nby this rating action can be found on Standard Poor's public Web site at \nwww.standardandpoors.com. Use the Ratings search box located in the left \ncolumn.<\/pre>\n