Moody's turns Energizer view to negative

Moody's Investors Service said it changed its outlook for Energizer Holdings, Inc. to negative from stable and affirmed its ratings, including the Ba1 ratings on the company's senior secured first-lien term loan due 2027 and the senior secured first-lien revolving credit facility due 2025 and the B2 rating on the senior unsecured notes. Energizer's SGL-1 speculative grade liquidity rating is unchanged.

“The change to a negative outlook captures the elevated risk that leverage remains very high and that it will likely take several years to restore leverage to a range expected for the rating even with the projected improvement in fiscal 2023 and 2024. Less EBITDA margin improvement than anticipated due to continued cost pressures or a weakening demand environment could slow deleveraging progress, particularly if Project Momentum cost savings are lower than expected.

“Volume declines that are not offset through pricing or if the working capital reduction is less than anticipated could also limit free cash flow generation resulting in lower-than-expected debt reduction,” Moody’s said in a press release.

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