Baines has accumulated a seriously large position in LGCY over the past year, so they are just talking their book.  A boulder of salt is required.

 

On the other hand, I don't really understand the basis for the bond downgrade by (I think) S&P.  They said it is due to the exchange of some of the 2020 and 2021 bonds for convertible bonds due 2023.  These are convertible (at $6/share) by the holder at will and by the issuer if the share price remains above $6 for 20 out of 30 consecutive business days.  The price of the bonds rose significantly on that news, but S&P calls it a selective default due to extending the maturity and the mandatory conversion aspect.

 

As I understand it, this was a voluntary transaction freely negotiated with some of the bondholders.  LGCY did not impose the exchange on anyone.  It's just a way to hopefully exchange debt for equity at a mutually agreeable price, and the bond market is positive about it. 

 

Why does this warrant a downgrade?  I am definitely not an expert on this sort of thing, so I would appreciate it if anyone more knowledgeable could explain it to me.