Moody’s changes Kenan Advantage view

Moody’s Investors Service said it changed the outlook of Kenan Advantage Group, Inc. to negative from stable.

The agency also affirmed Kenan's B2 corporate family rating and B2-PD probability of default rating, as well as the B1 rating on its senior secured bank credit facilities and Caa1 rating on its senior unsecured notes.

Moody’s said the negative outlook reflects Kenan's sustained negative free cash flow and slow progress with delivering, following the periodic assumption of debt to fund acquisitions, even after a recovery in end-markets gained momentum in 2017 after severe drops in the prior two years.

Coverage metrics are relatively weak, and debt-to-EBITDA remains elevated for the rating category, the agency said.

Earnings accretion including from acquisitions has been slow to materialize, Moody’s added.

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