Moody's slices Mobileum

Moody's Investors Service said it downgraded Matrix Parent, Inc.'s (Mobileum) senior secured first-lien bank credit facilities to Caa2 from B3 and senior secured second-lien term loan to Ca from Caa3. The agency also cut the corporate family rating to Caa3 from Caa1 and the probability of default rating to Caa3-PD from Caa1-PD.

“The downgrade reflects Moody's expectation that Mobileum's operating performance will continue to be pressured and the company's liquidity position will continue to deteriorate over the next 12 months. Moody's views Mobileum's capital structure as unsustainable with debt/EBITDA leverage of about 20x (Moody's adjusted after expensing software development costs and excluding unrealized cost-saving benefits) or about 14x if the proposed cost-saving benefits are included as of the LTM period ended Sept. 30, 2023.

“Moody's believes that the company has limited financial flexibility to execute a meaningful operational turnaround driven by subpar operating performance, macroeconomic challenges, and weak liquidity,” the agency said in a press release.

The agency also noted Mobileum’s Oct.24, that it had breached certain covenants under its first-lien and second-lien credit agreements concerning the failure to maintain proper books of record and delivery of incorrect or misleading financial statements.

The outlook remains negative.

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