Standard & Poor’s cuts Hawker Beechcraft to selective default

Standard & Poor’s has cut Hawker Beechcraft’s corporate credit rating to selective default from CC-. It has also changed the rating on its secured credit facility to default.

“We do not believe Hawker Beechcraft Inc. made the scheduled interest payment due on March 30, 2012, on its secured credit facility,” said Standard & Poor’s in a release.

The rating agency says it will lower the corporate credit rating and related issue ratings to D if it confirms that Hawker Beechcraft failed to meet the payment.

Hawker Beechcraft today said that it was late filing its annual report with the SEC because its management team had been tied up in negotiations with lenders and because it is having problems with a new enterprise information system.

Standard and Poor’s added: “On March 27, the company announced that it had reached a forbearance agreement with 70% of its lenders that defers any interest or other payments due on its secured credit facility through June 29, 2012. Although some of the lenders had opted to not receive the scheduled interest payment, our criteria considers this a default. The company also had $28 million of interest payments due April 1, 2012, on its unsecured and subordinated notes. If Hawker didn’t make these payments, we will lower the corporate credit rating and related issue ratings to ‘D’.”

Ratings List  

Downgrades

Hawker Beechcraft Inc. Corporate credit rating downgraded to SD/– from CC/Negative/–
Hawker Beechcraft Acquisition Co. LLC Senior secured  to D from  CC

Recovery rating stays unchanged at 4

Ratings Affirmed

Hawker Beechcraft Acquisition Co. LLC

Senior unsecured                  C

Recovery rating                  6

Subordinated                      C

Recovery rating                  6