Moody’s cuts Kellermeyer Bergensons

Moody's Investors Service said it downgraded Kellermeyer Bergensons Services LLC’s corporate family rating to Caa1 from B3 and probability of default rating to Caa1-PD from B3-PD, citing very high financial leverage.

“The downgrade of KBS's CFR to Caa1 is largely the result of very high financial leverage, and constrained free cash flow owing to a high interest burden, and elevated cash investment in working capital to support new business wins and acquisitions. KBS's aggressive expansion strategy is making it difficult to alleviate a heavy financial burden, or even to internally fund potential payouts of contingent obligations related to recent acquisitions,” said Vladimir Ronin, Moody’s lead analyst for the company, in a press release.

Moody’s also cut the company’s first-lien revolver and first-lien term loan to B3 from B2 and the senior secured second-lien term loan to Caa3 from Caa2.

The outlook was revised to negative from stable.

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