Moody’s downgrades ASM

Moody’s Investors Service said it downgraded SMG US Midco 2, Inc.’s (ASM Global) ratings, including its corporate family rating to B3 from B1, probability of default rating to B3-PD from B1-PD and first-lien term loan rating to B3 from B1. Moody’s also downgraded the instrument ratings on SMG Holdings, LLC’s revolver to B3 from B1. The agency changed the outlook to negative.

The rating downgrades reflect Moody’s expectation of significant contraction in ASM’s earnings and cash generation in 2020 due to increased cancellations of events, shows and business conferences amid heightened Covid-19 risk. Moody’s said it acknowledges the company’s strong cash position of over $200 million and availability under its $96 million revolving credit facility, which renders adequate liquidity through the current disruptive period.

The negative outlook reflects further downside risk to the current earnings and cash flow forecast.

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