Moody's slices Instant Brands

Moody's Investors Service said it downgraded Instant Brands Holdings Inc.'s ratings including its corporate family rating to Caa2 from B3, its probability of default rating to Caa2-PD from B3-PD, and the rating on the company's first-lien term loan due 2028 to Caa3 from B3.

The outlook is negative.

"Today's ratings downgrade and negative outlook reflect Instant Brands' unsustainable capital structure and the elevated risk of default including the potential for a distressed exchange over the next 12-18 months,." said Oliver Alcantara, a Moody's assistant vice president and analyst, in a press release.

"We expect that demand and industry headwinds will persist in 2023 and the company has limited financial flexibility to navigate a challenging operating environment given its high financial leverage and constrained liquidity," Alcantara added.

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