Moody’s turns Embecta view to negative

Moody's Investors Service said it revised Embecta Corp.'s outlook to negative from stable. Concurrently, the agency affirmed Embecta's Ba3 corporate family rating, Ba3-PD probability of default rating and Ba3 instrument ratings on the senior secured first-lien revolving credit facility, senior secured first-lien term loan and senior secured global notes. Embecta's speculative grade liquidity rating remains unchanged at SGL-1.

“The revision of the outlook to negative reflects the increased likelihood that Embecta will be unable to maintain credit metrics consistent with the existing Ba3 CFR over the next 12-18 months. Embecta's margin profile is trending below Moody's original expectations, driven in part by persistent supply chain and inflationary headwinds,” Moody’s said in a press release.

However, the agency notes that “Embecta's profitability remains good relative to its medical device peers, Moody's expects that Embecta's margins will continue to trend lower over the next 12-18 months as it establishes additional standalone infrastructure and pursues research and development initiatives.”

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