Moody's downgrades Lecta

Moody's Investors Service said it downgraded the corporate family rating of Lecta SA to B2, probability of default rating to B2-PD and the instrument ratings of its senior secured bonds to B2 (LGD 4,51).

The outlook also was revised to stable from negative.

The downgrade follows Lecta's accelerated negative performance during 2013 and reflects a view that the company's key credit metrics have weakened sufficiently to be more in line with the B2 rating level, said Matthias Volkmer, a Moody's analyst.

As of September 2013, all of Lecta's credit metrics deteriorated, including its EBITDA margin at less than 5% and its debt-to-EBITDA ratio to about 10.5x, Volkmer said.

The stable outlook reflects an expectation of a stabilizing performance during the course of 2014, the analyst said.

Although the agency said it expects free cash flow generation to be negative during 2014, largely a result of increasing capital expenditures, continued restructuring costs and negative working capital changes, profitability is likely to improve gradually.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.