Moody’s revises Kemet to stable

Moody's Investors Service said it revised Kemet Corp.'s outlook to stable from positive following the announcement that it will not proceed with the planned $400 million issuance of senior secured notes.

The agency affirmed the Caa1 corporate family rating, Caa1-PD probability of default rating, Caa1 senior secured rating and SGL-4 liquidity rating.

Moody’s said the stabilization of the rating outlook reflects its expectation that Kemet's profitability will improve over the next year as the company begins to capture the benefit of the past several years of restructuring and vertical integration activities, but the inability to refinance the existing senior notes on acceptable terms is concerning given Kemet's limited internal sources of liquidity.

Moreover, the positive outlook had anticipated some modest improvement in Kemet's interest burden due to the planned refinancing, which also would have pushed out Kemet's largest block of debt by a year, the agency said.

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