Moody’s warns over weak credit quality after debt restructurings

Companies having to undergo distressed debt exchanges are likely to end up with weak credit profiles even after debt write-offs, Moody’s warned on Tuesday. The rating agency cautioned that most distressed exchanges would probably result in the company being rated in the Caa, or at best, B3 range, because lenders have no incentive to write down their debt further than is necessary to keep the company afloat.