Moody’s lowers Heubach

Moody's Investors Service said it downgraded SK Neptune Husky Intermediate IV Sarl's (formerly Luxembourg Investment Co. 437 Sarl or Heubach) corporate family rating and probability of default rating to Caa2 from B3 and Caa2-PD from B3-PD, respectively. Concurrently Moody's downgraded Heubach's backed senior secured debt instruments, borrowed by Luxembourg Investment Co. 438 Sarl, to Caa2 from B3, which comprise a CHF 560 million equivalent term loan and a $125 million revolving credit facility.

Heubach’s revenues year-to-date in September 2023 dropped 23% hurt by lower sales volumes in all market segments and regions. “Currently, the agency considers there is very limited visibility for a meaningful earnings recovery in 2024 and expects the company will remain Moody's adjusted free cash flow negative in the next 12 to 18 months,” the agency said in a press release.

Moody’s said it considers the company’s capital structure “unsustainable” but noted Heubach in talks to raise capital.

The outlook for both entities remains negative.

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