Moody’s cuts Enviva

Moody's Investors Service said it downgraded Enviva Inc.'s corporate family rating to Ca from Caa1 and the probability of default rating to Ca-PD/LD from Caa1-PD, following a limited default due to a missed interest payment on its unsecured debt. Moody's also downgraded the ratings on its senior unsecured notes due 2026, The speculative grade liquidity rating was maintained at SGL-4, but the outlook was changed to negative from ratings under review.

On Feb. 15, Enviva entered into a forbearance agreement with its lenders after it missed an interest payment. The pact, unless extended, ends on March 4.

“The downgrade to Ca reflects the fact that in bankruptcy, noteholders could be required to take a meaningful haircut to outstanding debt, given the uncertainty over future profitability and the value of the company's assets,” Moody’s said in a press release.

The negative outlook reflects the doubts for recovery until Enviva inks a formal agreement with its debtholders or it files for bankruptcy, the agency said.

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