Moody’s slices Titan

Moody’s Investors Service said it downgraded its ratings for Titan International, Inc., including the company’s corporate family rating to Caa3 from Caa1, the probability of default rating to Caa3-PD from Caa1-PD and the senior secured rating to Ca from Caa2.

The downgrades reflect expectations for challenging industry conditions through 2020 to pressure Titan’s earnings and cash flow, resulting in the company’s capital structure remaining unsustainable with excessive financial leverage above 10x debt/EBITDA likely into 2021 and a weak liquidity profile reliant on external and alternative funding sources,” Moody’s said in a press release.

The agency said it sees the possibility of a debt restructuring of some type to be very elevated, with expected recovery for the senior secured notes to be in a range around 30%.

The outlook is stable.

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