Moody’s changes Galapagos to negative

Moody's Investors Service said it changed the outlook on all ratings of Galapagos Holding SA to negative from stable.

At the same time, the agency affirmed the B3 corporate family rating, the B3-PD probability of default rating, the Caa2 rating pertaining to the senior unsecured notes and the B2 rating pertaining to the senior secured notes issued by Galapagos SA.

"The decision to change the outlook on Galapagos to negative reflects (1) the negative trend in order backlog (23.3% lower year-on-year at group level), in particular at Enexio and (2) the very low headroom of 4.1% (or €3.8 million) under the EBITDA covenant of the company's revolving credit facility," Oliver Giani, Moody's lead analyst for Galapagos, said in a news release.

"Despite of initiated restructuring measures it will become increasingly challenging for Galapagos to sustainably improve credit metrics to a level in line with the thresholds set for the B3 rating category and to meet the financial condition requirement of its credit facility.”

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