ContiFinancial Sr Debt Lowered To `CCC+' By Fitch IBCA.NEW YORK--(BUSINESS WIRE)--June 4, 1999-- Fitch IBCA IBCA International Braille Chess Association IBCA Institute of Burial and Cremation Administration IBCA Integrated Business Communications Alliance IBCA International Barbeque Cookers Association IBCA Department of Interior Board of Contract Appeals lowers the senior debt ratings of ContiFinancial Corp. to `CCC CCC A very speculative grade assigned to a debt obligation by a rating agency. Such a rating indicates default or considerable doubt that interest will be paid or principal repaid. Also called Caa. +' from `B+.' The ratings remain on RatingAlert evolving where they were initially placed on May 19, 1999. Approximately $700 million in outstanding senior debt is affected. Today, ContiFinancial announced that it expects to report a pre-tax loss of approximately $247 million for the fiscal- quarter ended March 31, 1999. Fitch IBCA believes that ContiFinancial's ability to operate as a going concern faces serious challenges, without an acquisition or a significant capital contribution. This concern has been heightened by the substantial loss that is expected to be reported to be spoken of; to be mentioned, whether favorably or unfavorably. See also: Report for the most recent fiscal quarter. The RatingAlert evolving continues to reflect ContiFinancial's May 19, 1999 announcement that it has signed a written indication of interest with Residential Funding Corp. (RFC (Request For Comments) A document that describes the specifications for a recommended technology. Although the word "request" is in the title, if the specification is ratified, it becomes a standards document. ), a subsidiary of General Motors Acceptance Corp., which in turn is the finance subsidiary of General Motors Corp. The written indication of interest specifies the acquisition through merger of 100% of the issued and outstanding shares of ContiFinancial. Specific terms of this proposed acquisition have not been completed and negotiations are continuing. RatingAlert evolving by Fitch IBCA indicates that the future direction of the rating is uncertain. If an acquisition by RFC or another institution is completed, ContiFinancial's ratings will likely be raised based on the financial resources of the acquirer. Without this acquisition or some other significant capital transaction, ContiFinancial's ratings will likely be lowered further, as Fitch IBCA believes the company will be challenged to renegotiate re·ne·go·ti·ate tr.v. re·ne·go·ti·at·ed, re·ne·go·ti·at·ing, re·ne·go·ti·ates 1. To negotiate anew. 2. To revise the terms of (a contract) so as to limit or regain excess profits gained by the contractor. existing committed credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities that mature on Aug. 20, 1999. If the credit facilities cannot be extended, the company would be subjected to significant liquidity constraints. |
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