Moody's alters Edgewell view to negative

Moody's Investors Service said it changed its outlook for Edgewell Personal Care Co. to negative from stable and lowered the speculative grade liquidity rating to SGL-2 from SGL-1.

Concurrently, the agency affirmed Edgewell’s Ba3 corporate family rating, Ba3-PD probability of default rating and Ba3 ratings on the company's senior unsecured notes due 2028 and 2029.

The weaker outlook reflects the greater risk that leverage will not retreat as quickly as forecasted because of a challenging economic backdrop and Edgewell’s continued share repurchases, the agency said.

“Moody's expects the company to reduce the level of share repurchases from the high $116 million amount over the last 12 months, but share repurchases are likely to continue and this will limit the pace of debt and leverage reduction,” the agency added.

The lower SGL rating reflects the reduction in cash and increased revolver borrowings from acquisitions, share repurchases, and negative free cash flow due to working capital usage, Moody’s said.

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