Moody’s drops Cunningham Lindsey, loans

Moody's Investors Service said it downgraded the corporate family rating of Cunningham Lindsey U.S. Inc. to B2 from B1 based on lower global insured claims volumes leading to a decline in projected revenues and EBITDA.

The agency also downgraded Cunningham Lindsey's probability of default rating to B2-PD from B1-PD, first-lien term loan and revolving credit facility ratings to B1 from Ba3 and second-lien term loan rating to Caa1 from B3.

The outlook is negative, reflecting the company's substantial financial leverage and limited interest coverage along with the challenge of expanding revenues and earnings, given the fluctuations in global claims activity.

"The rating downgrade reflects the challenges Cunningham Lindsey has faced from a decline in global insured claims volume over the past year, and low catastrophe losses in the US, leading to a decline in revenue and earnings, higher financial leverage and lower interest coverage," Enrico Leo, Moody's lead analyst for Cunningham Lindsey, said in a news release.

"The company is taking steps to reduce costs and expand its service offerings, but we regard the projected credit metrics as more consistent with a B2 corporate family rating."

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