Moody's downgrades Mediq

Moody's Ratings said it downgraded Mediq's (Magellan Dutch BidCo BV) senior secured term loan and senior secured revolving credit facility to B3 from B2. The agency also lowered the long-term corporate family rating to B3 from B2 and its probability of default rating to B3-PD from B2-PD.

“The downgrade reflects the company's weak credit metrics for the 12 months ended December 2023 as illustrated by the high Moody's-adjusted debt to EBITDA at 9.8x and weak EBITA to interest coverage ratio at below 1x. These metrics include around €30 million of one-off costs, which are higher than Moody's anticipated for 2023. The one-off costs were related to the consolidation of Mediq's most recent acquisitions, which were closed towards the end of 2022, in addition to several projects that were designed to enhance cost efficiency.

“The action also reflects Moody's expectation that Mediq will not achieve credit metrics commensurate with the guidance for the previous B2 rating over the next 12 to 18 months, despite expected improvement in EBITDA and cost efficiency realization,” the agency said in a press release.

The outlook remains stable.

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