Moody's downgrades Dynata

Moody's Investors Service said it downgraded Research Now Group, LLC's (Dynata) corporate family rating to B3 from B2, its probability of default rating to B3-PD from B2-PD, its senior secured first-lien instrument rating to B2 from B1, and its senior secured second-lien rating to Caa2 from Caa1. The agency changed the outlook to negative from stable.

“Because the company has allowed its liquidity position to deteriorate – given a heavily-drawn revolver whose commitment amounts begin reducing in mid-2023, an all-floating-rate-debt capital structure in a rapidly rising interest rate environment, and an onerous short-term promissory note, all without forthcoming explicit support from private equity owners – governance considerations are a driver of this ratings action,” Moody’s said in a press release.

The weak outlook considers the tightening liquidity driven by limited forecasted free cash flow, a heavily drawn revolver whose expiration is approaching, minimal covenant headroom, and a substantial upcoming payment due on the promissory note, the agency said.

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