Moody's lowers Lycra

Moody's Investors Service said it downgraded Eagle Intermediate Global Holding BV's (the Lycra Co.) corporate family rating to Caa2 from Caa1, its probability of default rating to Caa2-PD from Caa1-PD and the company's senior secured notes to Caa2 from Caa1. Moody’s lowered the speculative grade liquidity rating to SGL-4 from SGL-3 and changed the outlook to negative from stable.

"The rating downgrade reflects the company's tight liquidity, near-term refinancing risk and weak earnings outlook. Although spandex demand will gradually recover with China's reopening this year, the company's liquidity isn't likely to improve in the near future given the expected weak cash flow and one-off expenses. Refinancing risk is high for its €250 million senior secured notes due in May 2023. Poor credit metrics, inadequate liquidity and upcoming debt maturity will likely result in a financial restructuring," said Jiming Zou, a Moody's vice president and lead analyst for the Lycra Co., in a press release.

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