Moody's downgrades Fetch

Moody's Investors Service said it downgraded Fetch Acquisition LLC's corporate family rating to B3 from B2 and downgraded the probability of default rating to B3-PD from B2-PD. Moody's also downgraded the company's first-lien revolver and term loan ratings to B2 from B1. The outlook is negative.

The downgrade reflects Moody's expectation Fetch will no longer be in a position to reduce its financial leverage (Moody's Adjusted Debt to EBITDA) to below 6x within the next year due to demand disruptions from the pandemic that will have a negative effect on the company's discretionary products. Job losses due to the coronavirus will lead to cutbacks in discretionary consumer spending, which Moody's said it expects will weaken Fetch's operating performance.

Moody's said it expects operating income will decline by mid-to-high single digits and that debt/EBITDA will increase to around 8.5 to 9x over the next six to 12 months.

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