Moody’s downgrades GCA, facilities

Moody's Investors Service said it downgraded Erie Acquisition Holdings, Inc.'s (GCA Services Group, Inc.) corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD, senior secured first-lien credit facility ratings (including term loan and revolver) to B2 from B1 and second-lien senior secured term loan to Caa2 from Caa1.

The outlook is stable.

Moody’s said the downgrade of the corporate family rating reflects weaker-than-expected sales and profitability since the 2016 leveraged buyout (LBO), as well as the agency’s view that GCA's financial risk profile will remain elevated over the next 12 to 18 months.

GCA's underperformance is being driven by slower than expected growth in its education segment, which in the past has provided for solid growth prospects with highly reliable and stable revenue and cash flow stream, the agency added.

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