Moody’s lowers Sterling, DFC Finance

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 Caa1 from B3.

The outlook is negative. These actions conclude the review for downgrade initiated on April 29.

Moody’s said the downgrade was mainly driven by Sterling's weak profitability, high leverage, and uncertainties over the company's ongoing restructuring efforts in the U.K.

Since 2014, Sterling's credit metrics has been weaker than those of most rated peers reflecting sizable net losses and higher leverage as a result of lower loan volume due to regulatory transition in the U.K. Furthermore, the weaker profitability and higher leverage while expected by Moody's has been more pronounced.

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