Moody’s cuts Harland Clarke

Moody’s Investors Service said it downgraded Harland Clarke Holdings Corp.’s corporate family rating to Caa1 from B3 and its probability of default rating to Caa1-PD from B3-PD.

Moody’s also downgraded the ratings on the senior secured term loan and senior secured notes to B3 from B2 and the senior unsecured notes were downgraded to Caa3 from Caa2.

“The downgrade of the CFR with a negative outlook reflects Harland Clarke’s imminent need to address the maturity of its $709 million notes due March 2021 at a time when the company remains under continued secular pressure and has generated negative free cash flow for the last 12 months ended September 30, 2019. Should Harland Clarke fail to refinance or extend the maturity of the $709 million notes, it faces a sizable wall of debt maturities,” said Moody’s in a press release.

The agency said it revised the outlook to negative reflecting the downgrade risk if the company can’t address these upcoming maturities.

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