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Moody's downgrades Skillz
Moody's Investors Service said it downgraded Skillz Inc.'s corporate family and senior secured ratings to Caa2 from Caa1 following the company's recent buyback of more than 50% of its outstanding debt at a sizable discount to par, reducing available liquidity to fund forecasted cash flow deficits.
Moody's also dropped the probability of default rating D-PD from Caa1-PD because it considers the repurchase transaction to be a distressed exchange. In a few business days, the agency said it will boost Skillz's PDR to Caa2-PD, consistent with the probability of default embedded in the Caa2 CFR.
Additionally, Moody's downgraded the speculative grade liquidity rating to SGL-2 from SGL-1. The outlook is revised to negative from stable.
“The negative outlook reflects the risk of further distressed exchanges as well as the likelihood of further liquidity erosion from operating losses,” the agency said in a press release.
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