GSC Group, a Florham Park, N.J.-based investment shop overseeing more than $18 billion in assets, has defaulted on its bank loan, according to Moodys Investors Service.
GSC missed a scheduled payment on its term loan, resulting in the downgrade of its credit facility to 'Ca' from 'Caa1'. Moody's also placed the rating on review for possible further downgrade.
GSC is presently considered to be highly dependent on realizing gains from assets sales in the distressed debt and equity funds segment of the business, said Matthew Noll, a Moody's vice president and senior credit officer. Our rating review will evaluate GSC's efforts to reduce the uncertainties with debt obligations and devise a viable going-forward plan as an investment manager.
Moodys commented that GSC has been under significant rating pressure since December 2007, when severe disruptions in structured credit markets arose. Since that time, GSC's managed investment vehicles CDOs CLOs, mezzanine funds, distressed debt and equity funds have been greatly impacted.
We are in negotiations with the banks as we speak, talking about restructuring the loan, Carl Crosetto, a GSC managing director in investor services told Bloomberg. Many people are experiencing tough times. We have a situation we have never seen before in the credit markets, certainly not in most peoples lifetime.
GSC manages nine U.S. CLOs, and five in Europe.