Moody’s drops Towergate, debt

Moody's Investors Service said it downgraded the corporate family rating and probability of default rating of Towergate Holdings II Ltd. by one notch to Caa1/Caa1-PD.

The senior secured and senior unsecured instruments issued by Towergate Finance plc were also downgraded by one notch to B2 and Caa3, respectively.

All ratings were placed on review for further downgrade.

Moody's said the Caa1 corporate family rating reflects a combination of Towergate's strong U.K. insurance broker market presence and historically good, albeit declining, EBITDA profitability.

However, the agency said, the downgrade reflects the material decline in profitability during the first nine months of 2014, and especially the third quarter, which has resulted in: (a) A significant deterioration in the Group's operational cash flow and liquidity, and (b) an increase in the already significantly high debt-to-EBITDA ratio of 9.2 times (on a Moody's basis) at 2013 year-end, with the croup entering discussions around the renegotiation of the tightened financial covenant under its revolving credit facility, which was fully drawn at the end of the 2014 third quarter.

© 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.