Moody’s drops Sterling Mid-Holdings, DFC

Moody's Investors Service said it downgraded Sterling Mid-Holdings Ltd.’s corporate family and DFC Finance Corp.'s senior secured ratings by one notch to B3 from B2 and placed the ratings on review for downgrade.

Moody’s said the downgrade reflects the deterioration in Sterling's credit metrics including sizable net losses and higher leverage mainly driven by lower loan volume as a result of regulatory transition in the U.K.

Furthermore, the weaker profitability and higher leverage while expected by Moody's has been more pronounced. The company's weak performance in the U.K. is partially offset by relatively stable operations in the U.S. and Canada, which continue to generate positive EBITDA and account for about 15% and 37% of Sterling's total revenue, respectively.

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