Moody’s lowers Hoover Group

Moody's Investors Service downgraded Hoover Group, Inc.'s ratings, including the company's corporate family rating and probability of default rating to Caa2 and Caa2-PD from Caa1 and Caa1-PD, respectively.

Moody's also downgraded its existing ratings for the company's senior secured first-lien bank credit facilities to B3 from B2.

At the same time, Moody's assigned a B3 rating to the company's new $25 million senior secured first-lien revolver due January 2021.

Proceeds from the new revolver will be used to reduce the existing revolver commitment due January 2020 to $5 million from $30 million.

The outlook remains negative.

“The downgrade reflects Hoover's underperformance year-to-date relative to Moody's expectations and the elevated likelihood of a default leading up to the January 2021 debt maturities given the company's negative free cash flow, high leverage, and headwinds in the energy sector,” the agency said in a news release.

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