Moody’s lowers Novafives CFR, debt

Moody's Investors Service said it downgraded Novafives SAS’ corporate family rating to B1 from Ba3, probability of default rating to B1-PD from Ba3-PD and senior secured rating to B2 from B1.

The outlook on all ratings was changed to negative from stable.

Moody's said it downgraded Novafives to B1 from Ba3 and changed the outlook to negative from stable due to the company's much weaker than forecast operating performance and the expectation that ongoing earning pressures will now challenge the company's ability to improve gross adjusted debt/EBITDA to around 5.5 times over the next 12 to 18 months.

The agency also expects Novafives may be challenged to generate sufficient free cash flow (FCF) to allow FCF/debt to exceed the mid-single digit range, levels considered more commensurate for a B1 rating in the context of Novafives' business profile.

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