Moody's cuts Celestica ratings

Moody's Investors Service said it lowered all ratings of Celestica Inc., including Celestica's $1.15 billion (maturity balance) subordinated zero-coupon liquid yield option notes yielding 3¾% and due 2020 to Ba3 from Ba2, the senior implied rating to Ba2 from Ba1, and the senior unsecured issuer rating to Ba3 from Ba2.

Moody's said the downgrade was prompted by the company's continued challenges rightsizing its operational footprint and returning to core profitability within a materially improved end market environment. Further, the company's ongoing cash flow strain resulting predominantly from increased working capital requirements has heightened sensitivities to its competitive position as this relates to the underlying relationship leverage vis-a-vis its original equipment manufacturer partners.

The outlook remains negative, a reflection, the agency said, of the recurring doubts about the extent as well as timing to the company's realization of a full-fledged operational recovery; the generation of sustainable, positive operating cash flow; and the level of uncertainty associated with the timing to complete the recently announced restructuring as well as the concern that additional charges may follow.

© 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.