S&P Downgrades Cenevo, Inc. (CVO) to 'CC'; Outlook Remains Negative

S&P Global Ratings lowered its corporate credit rating on Cenveo Inc. (NYSE: CVO) to 'CC' from 'CCC+'. The rating outlook is negative.

At the same time, we lowered our issue-level rating on the company's 11.5% senior unsecured due May 2017 to 'CC' from 'CCC-'.

Our other ratings on the company remain unchanged.

The downgrade follows Cenveo's announcement that it has launched a subpar exchange offer for its 11.5% senior unsecured notes due 2017 and entered into a subpar exchange agreement for certain holders of its 7% senior convertible notes.

"We view the transaction as a distressed exchange because investors will receive less than what was promised on the original securities in terms of both principal and interest," said S&P Global Ratings credit analyst Minesh Patel. "As a result, if the exchange is completed as proposed, we would view the exchange as tantamount to default," Mr. Patel added.

The rating outlook is negative. We intend to lower our corporate credit rating on Cenveo to 'SD' (selective default) and lower the 11.5% senior unsecured notes rating to 'D' once the swap is completed. Subsequently, we would reassess Cenveo's prospective credit profile, and assign a corporate credit rating and outlook that reflect our assessment of the company's business risk and financial risk profiles, based on its revised capital structure.

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