Moody's trims Universal Fiber

Moody's Investors Service said it downgraded Universal Fiber Systems, LLC's corporate family rating to Caa1 from B3, first-lien senior secured rating to B3 from B2, and second-lien senior secured rating to Caa3 from Caa2. The outlook remains negative.

The rating downgrade reflects the heightened risk of the company breaching its financial covenant, maximum allowable total leverage ratio of 5.75x. Universal Fiber's total leverage ratio was at 5.63x for the quarter ending Sept. 30.

“We expect the declining demand on nylon fibers from the commercial carpet industry in North America and the Covid-19 pandemic will negatively affect its earnings and its ability to comply with the financial covenant in 2020,” said the agency in a press release.

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