Moody's changes Deoleo view to negative

Moody's Investors Service said it changed the outlook on Deoleo SA and its subsidiary Deoleo Financial Ltd. to negative from stable.

The agency also affirmed Deleo’s B3 long-term corporate family rating and the B3-PD probability of default rating. Concurrently, Moody's affirmed the B2 rating on the €160 million senior secured term loan due 2025 (€58 million outstanding as of September 2023) and the Caa2 rating on the €82 million senior secured junior-lien term loan due 2026, both borrowed by Deoleo Financial.

"The outlook change to negative from stable reflects Deoleo's weaker than anticipated year-to-date September 2023 operating performance due to its high exposure to the volatility in olive oil price, which high prices are curbing demand resulting in weaker earnings," said Valentino Balletta, a Moody's analyst and lead analyst for Deoleo, in a press release.

"The rating action also reflects the company's adequate, albeit tightening liquidity, and limited free cash flow generation capacity at current earning; continued pressure on profitability raises the refinancing risk on the company's June 2025 senior secured term loan," Balletta added.

Moody’s said it forecasts Deoleo’s leverage to hit 6.3x at year-end 2023 from 4.6x in 2022.

© 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.