Moody's cuts Vericast

Moody's Investors Service said it downgraded Vericast Corp.'s corporate family rating to Caa3 from Caa1, probability of default rating to Caa3-PD from Caa1-PD and lowered the ratings on its debt due 2022 and 2023 to Caa3 from Caa1. The agency changed the outlook to negative from stable.

Moody's also withdrew the ratings assigned to Vericast's canceled refinancing, including the B3 rating on the amended and extended term loan due 2026, the B3 rating on the first-lien senior secured note due 2026 and the Caa3 rating on the second-lien secured note due 2027. The withdrawals follow Vericast's decision to terminate its previously proposed refinancing transaction, the agency said.

“The ratings downgrade and outlook change to negative is prompted by Vericast's termination of the proposed refinancing and reflects risks to the sustainability of the capital structure given near-term debt maturities, the expectation of high leverage and negative pressure on earnings. Absent a meaningful improvement in operating performance, asset sales or sponsor's support, secular industry declines make it difficult for the company to materially reduce its high leverage and address its significant $2.2 billion of 2022/2023 maturities, thereby elevating default risk,” Moody’s said in a press release.

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