Moody’s cuts Crossmark, facilities

Moody's Investors Service said it downgraded Crossmark Holdings, Inc.’s corporate family rating to Caa2 from Caa1 and probability of default rating to Caa2-PD from Caa1-PD.

At the same time, the agency downgraded the company's senior secured first-lien bank credit facilities to Caa1 from B3 and senior secured second-lien term loan to Ca from Caa3.

The outlook is negative.

Moody’s said the downgrades reflect mounting pressure on Crossmark’s liquidity, which in conjunction with a fully levered balance sheet heightens the perceived risk of default over the forward rating horizon. In particular, Crossmark’s free cash flow turned negative for the first half of 2017, and the agency expects potential covenant pressure in early 2018 to constrain revolver availability.

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