Moody’s trims GlobalTranz

Moody’s Investors Service said it downgraded the ratings of GlobalTranz Enterprises, LLC, including the corporate family rating to Caa1 from B3, the probability of default rating to Caa1-PD from B3-PD and the senior secured bank credit facility to B3 from B2.

Moody’s changed the outlook to negative from under review.

This action concludes the review for downgrade started on March 31, the agency said.

“The ratings, including the Caa1 CFR, reflect sustained high financial leverage and Moody’s expectation of weak liquidity amidst end markets facing recessionary pressures and an uncertain business outlook, heightened by the coronavirus crisis. Over 50% of revenue is exposed to small and medium enterprises (SMEs), which are likely to be hard hit by the market weakness and sharp limitations on business from efforts to contain the pandemic,” Moody’s said in a press release.

There is high probability the company will not meet its springing leverage covenant test in the near term, without a waiver amendment or paying down about $49 million on its fully drawn $75 million revolver, the agency said.

The outlook reflects the expectation of profitability and liquidity to weaken through at least 2020, Moody’s said.

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