Moody’s shifts Epiq view to stable

Moody’s Investors Service said it revised the outlook to stable from negative and affirmed the ratings of DTI Holdco, Inc. (Epiq Global), including the corporate family rating at Caa2, the probability of default rating at Caa2-PD, and the first-lien senior secured credit facility rating at Caa2.

“The affirmation of the Caa2 CFR and the stable outlook reflect the company’s improved liquidity position following the October 2020 amendment and extension of its revolving credit facility and Moody’s expectation that Epiq’s earnings will stabilize over the next 12-18 months as the economy slowly begins to recover from the Covid-19 pandemic. Epiq has received some insurance recoveries in the second and third quarters of 2020 to offset operating costs and business interruption losses from the March 2020 ransomware attack and is expected to collect the remaining proceeds in the first quarter of 2021,” Moody’s said in a press release.

However, the agency noted it sees cash flow and liquidity staying volatile over the next 12-18 months. Moody’s also said it views the company’s capital structure as unsustainable over the longer-term without an increase in sustained earnings or significant restructuring of Epiq’s balance sheet on commercially viable terms.

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