Moody's cuts New Trojan Parent

Moody's Investors Service said it downgraded New Trojan Parent, Inc.'s ratings including its corporate family rating to B3 from B2, the probability of default rating to B3-PD from B2-PD, the first-lien bank credit facilities, which includes its revolver and first-lien term loan, to B2 from B1 and its second-lien term loan to Caa2 from Caa1.

“The downgrade reflects the company's high leverage since the LBO in early 2021. Although demand for medical scrubs has continued to be strong, New Trojan is facing elevated costs due to a challenging supply chain environment. The higher than expected costs has resulted in less EBITDA and free cash flow generation than expected and has delayed debt repayment leading to Moody's adjusted EBITDA of approximately 8.5x for the LTM period ended Sept.30, 2021,” the agency said in a press release.

The outlook is stable.

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