Moody’s cuts Avon to junk

Moody's Investors Service said it downgraded Avon Products, Inc.’s senior unsecured note ratings to Ba1 from Baa3 and Avon Capital Corp.’s commercial paper rating to Not Prime from Prime-3.

Moody’s also assigned Avon a Ba1 corporate family rating, Ba1-PD probability of default rating, and SGL-1 speculative grade liquidity rating.

The downgrade reflects Moody’s concern that competitive and structural challenges associated with Avon’s direct selling model are creating pressure on representative levels, revenue and cash flow. The outlook is stable.

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