Moody's snips United PF

Moody's Investors Service said it downgraded United PF Holdings, LLC's corporate family rating to Caa2 from B3 and probability of default rating to Caa2-PD from B3-PD. Concurrently, Moody's cut the ratings for the company's first-lien senior secured credit facilities to Caa1 from B2 and lowered the rating for its second-lien term loan to Ca from Caa2.

“The CFR downgrade to Caa2 reflects much weaker than expected operating performance in FY22, the expectation for very weak liquidity in FY23 even with an anticipated improvement in revenue and earnings due to the depletion of the once sizable cash balance that will potentially lead to revolver borrowings as the year progresses to fund negative free cash flow. Moody's views the company's capital structure with a high debt load ($744 million outstanding as of year-end 2022) and heavy interest expense burden as becoming increasingly unsustainable without a meaningful earnings improvement,” the agency said in a press release.

The outlook is negative.

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