Moody’s downgrades Archroma

Moody’s Investors Service said it downgraded to B3 from B2 the corporate family rating and downgraded to B3-PD from B2-PD the probability of default rating of Archroma Holdings Sarl.

Moody’s also downgraded to B2 from B1 the senior secured first-lien instrument ratings of the $754 million equivalent term loan B due in 2024, the $75 million committed revolving credit facility and the $75 million equivalent capex credit facility, both due in 2023 and converted the rating from provisional to definitive and downgraded to Caa2 the (P) Caa1 rating of the $105 million second-lien facility due in 2025. The borrower of all these facilities is Archroma Finance Sarl, a holding company and 100% controlled by Archroma Holdings.

“The downgrade of Archroma’s CFR to B3 reflects its relatively high debt levels and weak free cash generation for its B2 rating entering a downturn in some of its historically relatively cyclical end markets such as textile and paper chemicals caused by Covid 19. This is likely to result in weak Moody’s adjusted debt /EBITDA exceeding our expectations of around 6x and FCF potentially turning negative in the current fiscal year and those metrics not returning to levels required for a B2 rating in 2021,” Moody’s said in a press release.

The outlook remains stable for both entities.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.