Moody’s cuts Breitling

Moody’s Investors Service said it downgraded Breitling Holdings Sarl’s corporate family rating to B3 from B2 and its probability of default rating to B3-PD from B2-PD. Moody’s also downgraded the instrument ratings of the €514 million term loan B and the CHF 80 million revolving credit facility raised by Breitling Financing Sarl to B3 from B2. The outlook on both entities is negative.

“Because of the Coronavirus outbreak, Breitling’s leverage will likely remain higher than the level commensurate with a B2 rating for a prolonged period of time. Its credit quality weakened in 2019 following the payment of a CHF 158 million dividend in November but the rating agency assumed at the time that it would gradually recover,” Moody’s said in a press release.

“Although consequences of the Coronavirus epidemics are difficult to assess so far, Breitling’s Moody’s-adjusted debt/EBITDA will likely deteriorate in fiscal 2021 and possibly rise to about 7-8x, compared to about 6x in fiscal 2019,” said the agency.

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