Moody's downgrades DIA

Moody's Investors Service said it downgraded the long-term corporate family rating of Distribuidora Internacional de Alimentacion (DIA) to Caa1 from B2, along with its probability of default rating to Caa1-PD from B2-PD.

Moody's also said it downgraded DIA's senior unsecured long-term ratings to Caa1 from B2.

The ratings were also placed under review for downgrade.

The decision reflects the uncertain support of DIA's main shareholder LetterOne, whose representatives have resigned from the company's board, Moody's explained.

This heightens uncertainties at a time when the company is trying to negotiate new sources of financing with its banks and is considering a capital increase, which would require the approval from the majority of its shareholders, the agency said.

Moody's also said it believes accounting errors disclosed in recent months point to weaknesses in DIA's governance.

S&P downgrades Imagine

S&P said it lowered the issuer credit rating on the Imagine Group LLC to B- from B, along with the rating on the first-lien credit facility to B- from B and the rating on the second-lien term loan to CCC from CCC+.

The downgrades reflect an expectation that the company's lower-than-expected operating performance over the past 18 months will continue, leading to a free operating cash flow-to-debt sustained at less than 5%, S&P said.

The ratings consider the company's high debt interest costs, poor working capital management and client program delays, the agency said.

The company will continue to face significant competition and ongoing restructuring costs will pressure EBITDA generation and cash flows despite modest revenue growth, S&P said.

Moody's downgrades Moby

Moody's Investors Service said it downgraded Moby SpA's corporate family rating to Caa2 from Caa1 and probability of default rating to Caa2-PD from Caa1-PD.

The outlook was revised to negative from stable.

Moody's also said it downgraded the rating assigned to the €300 million worth of senior secured notes to Caa1 from B3.

The downgrades reflect Moby's very weak trading performance and significant cash burn during its key third quarter period, which translate into increased liquidity risks, the agency said.

The downgrades also consider the increased likelihood of a debt restructuring or a distressed exchange, given the potential liquidity shortfall that the company is facing over the next 12- to 18-months, Moody's said.

Moody's downgrades Weatherford

Moody's Investors Service said it downgraded Weatherford International Ltd.'s corporate family rating to Caa2 from B3 and probability of default rating to Caa2-PD from B3-PD.

Moody's also said it downgraded the senior unsecured notes of both Weatherford and Weatherford International, LLC to Caa3 from Caa1 and downgraded Weatherford's speculative grade liquidity rating to SGL-4 from SGL-3.

The outlook remains negative.

Weatherford has nearly $3 billion of debt maturities through 2021, Moody's said, and without a sustained improvement in its cash flow generation ability, the company will be challenged to refinance these maturities.

The company will not be able to meaningfully reduce debt through 2019 in a slowly improving industry environment, keeping its leverage at a very high level despite making progress with its business transformation and asset sale initiatives, the agency said.

© 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.