Moody's changes Tempur Sealy view to negative

Moody's Investors Service said it changed outlook for Tempur Sealy International Inc. to negative from stable. At the same time, Moody's affirmed Tempur Sealy's corporate family rating at Ba3, its probability default rating at Ba3-PD and its senior unsecured notes rating at B1. Tempur Sealy's speculative grade liquidity rating was downgraded to SGL-3 from SGL-2.

The negative outlook reflects the view Tempur Sealy's operating performance and operating cash flow will deteriorate over the next six to12 months, Moody’s said.

“The difficult economic environment presents considerable headwinds to stabilizing earnings and cash flow even with good execution and cost reductions. As a result, Moody's expects financial leverage to increase. In 2019 Tempur Sealy's debt to EBITDA was 3.5x and Moody's estimates that debt to EBITDA will be in excess of 5x in 2020,” the agency said in a press release.

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