Moody's lowers Steelcase notes to Ba2

Moody's Investors Service said it downgraded Steelcase Inc.'s senior unsecured notes rating to Ba2 from Baa3. Concurrently, Moody's assigned Steelcase a Ba1 corporate family rating, a Ba1-PD probability of default rating and an SGL-2 speculative grade liquidity rating.

The agency said it also changed the outlook to negative from under review, ending the review for downgrade started on Jan. 28.

“The downgrade and negative outlook reflect the company's continued weak operating performance as the timing and depth of the recovery in the office market remains uncertain due to delayed office openings prompted by the pandemic and concerns that hybrid work from home arrangements may have a more lasting negative impact on corporate investment in office space. Additionally, inflationary headwinds in commodity prices encountered in late 2021 and into 2022 are creating downside pressure on operating margins and free cash flow and, in Moody's view, makes it highly unlikely that the company will return to pre-pandemic earnings levels over the next few years,” the agency said in a press release.

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