Levels for Venture Holdings' bank debt have been dropping since the company announced that the German courts had commenced insolvency proceedings against its German subsidiary Peguform. But the paper slipped further--into the low-60s--this week after Moody's Investors Service downgraded the company's credit facility to Caa1 from B2. According to the Moody's report, the company is now in default under its U.S. credit facility and acceleration of its debt maturities is possible.
The German courts began the proceedings after the company was unable to obtain $200 million that the court-appointed temporary administrator deemed necessary to save the Peguform assets from insolvency before a Sept. 30 deadline. Calls to Michael Alexander, cfo, were not returned by press time.