Moody’s cuts Al Mistral

Moody’s Investors Service said it downgraded the corporate family rating of AI Mistral Holdco Ltd. (V.Group) to Caa1 from B3. The rating agency also downgraded V.Group’s probability of default rating to Caa1-PD from B3-PD.

Moody’s also downgraded to B3 from B2 the ratings of the first-lien facilities, including the $57.5 million revolver due 2022, the $515 million term loan due 2024, and the $30 million acquisition term loan facility due 2022, all at AI Mistral (Luxembourg) Subco Sarl, a directly owned subsidiary of AI Mistral Holdco Ltd.

“This rating action was driven by V.Group’s continued weakened performance owing to ongoing operational challenges, such as a reduction in fleet under full technical management,” said Maria Maslovsky, Moody’s vice president, senior analyst and lead analyst for V.Group, in a press release.

“The downgrade reflects V.Group’s failure to stem the losses of vessels under full technical management (FTM) which declined to 572 ships at 30 September 2019 from 627 vessels at year-end 2018, although total managed fleet increased to 902 ships. Still, FTM fleet is the driver of the company’s profitability as it generates higher margins. As a result, V.Group’s EBITDA declined to $71.9 million for the twelve months ending 30 September 2019 from $90.8 million in 2018, as reported by the company,” Moody’s said.

The outlook is stable.

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