Moody's downgrades Flamingo

Moody's Investors Service said it downgraded Flamingo Group International Ltd.’s ratings, including its corporate family rating to B3 from B2; its probability of default rating to B3-PD from B2-PD, and its backed senior secured bank credit facility rating to B3 from B2. Concurrently, the agency placed all ratings on review for downgrade and changed the company's outlook to ratings under review from stable.

“The downgrade of Flamingo's ratings follows the company's announcement of accounting misstatements on the financial information that it has provided to its lenders relative to financial years of 2021 and 2022 due to the intentional actions of a company employee at one of the company's subsidiaries, as well as significantly weaker operating performance in 2022 relative to Moody's previous expectations and the company's deteriorating liquidity profile with its €30 million backed senior secured revolving credit facility (RCF) maturing in less than 12 months,” the agency said in a statement.

Moody's warned these factors may affect the company's ability to refinance its revolver due February 2024 and its €280 million backed senior secured term loan B due February 2025.

Moody’s said its review will consider Flamingo’s trading performance and prospects for 2023, the operating performance in the early months of this year when it usually produces 40% of EBITDA and its ability to handle liquidity shortfalls.

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