Moody's snips Accell

Moody's Investors Service said it lowered Sprint BidCo BV's (Accell Group) corporate family rating to B3 from B2 and its probability of default rating to B3-PD from B2-PD. The agency also downgraded to B3 from B2 the instrument rating of the €705 million backed senior secured term loan B due June 2029 and the €180 million backed senior secured multicurrency revolving credit facility due December 2028. The outlook on all ratings was changed to stable from negative.

"The downgrade to B3 reflects the marked drop in earnings expected in 2023 and the company's still tight liquidity. As a result, Accell's credit metrics will remain much weaker than previously anticipated and for longer," said Giuliana Cirrincione, Moody's lead analyst for Accell, in a press release.

"At the same time, the prolonged negative effect that supply chain disruptions have had on working capital management, as well as the execution risk on the company's inventory reduction plan makes the pace of recovery in cash flow generation uncertain," Cirrincione added.

However, the improved outlook reflects an expectation that Accell's liquidity strains will lessen in line with a normalization in its working capital requirements and earnings will gradually recover, Moody’s said.

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