Credit rating agency Fitch announced this week that its long-term issuer default rating for Finance of America was downgraded to “restricted default” status following its recently publicized debt exchange plan. The rating was then upgraded to “CCC” following the completion of the exchange agreement.

Fitch explained its rationale for the whipsaw of ratings by characterizing FOA’s move as a “distressed debt exchange.” Fitch said the exchange “imposes a material reduction in terms compared with the existing contractual terms and is being done to avoid an otherwise likely eventual default.”

The reduction in terms details ⇒

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