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Moody's downgrades Zep
Moody's Investors Service said it downgraded Zep Inc.'s corporate family rating to Caa2 from B3 and the probability of default rating to Caa2-PD from B3-PD.
The agency also said it downgraded the company's first-lien senior secured credit facilities to Caa1 (LGD 3) from B2 (LGD 3) and second-lien term loan to Ca (LGD 5) from Caa2 (LGD 5).
The outlook is negative.
The downgrade reflects Zep's continued revenue and earnings decline, Moody's said, as well as the challenges related to its ongoing restructuring efforts.
Leverage on an adjusted basis has risen to about 10x for the trailing 12 months that ended in February, the agency said.
Moody's said it expects leverage to remain very high over the next 12- to 18-months.
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