Standard & Poor’s Ratings Services said today that it lowered its corporate credit rating on Progressive Gaming International Corporation (NASDAQ:PGIC) to ‘D’ from ‘CCC’.
“The downgrade follows PGIC’s 8K filing of Dec. 24, 2008, in which it said its management team is cooperating with its senior secured lender to conduct a sale of substantially all of PGIC’s assets pursuant to a Notification of Disposition of Collateral received on Dec. 17, 2008,” said Standard & poor’s credit analyst Melissa Long.
The sale of collateral will occur on Jan. 15, 2009, to the highest qualified bidder, unless PGIC redeems the collateral at any time before the sale by paying all obligations in the amount of about $17 million (before certain adjustments of about $1.1 million) and all reasonable expenses of the agent. PGIC had violated covenants under its senior credit facilities for the quarter ended Sept. 30, 2008.
On Nov. 7, 2008, PGIC’s senior lender issued an acceleration notice for the company’s senior secured revolving credit facility and term loan. Subsequent to this, the lenders entered into a forbearance agreement which expired on Nov. 21, 2008.
The ratings were lowered ratings to ‘D’ because the forbearance agreement between the lenders and PGIC has expired without the loans being repaid, and because the lenders are now pursuing recovery through the sale of collateral. Following this action, the ratings have been withdrawn.
