Moody’s drops Cunningham Lindsey, loans

Moody's Investors Service said it downgraded Cunningham Lindsey U.S. Inc.’s corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD, first-lien term loan and revolving credit facility to B2 from B1 and second-lien term loan to Caa2 from Caa1.

The downgrade is based on declines in revenue and EBITDA resulting in weaker credit metrics.

The outlook is now stable.

"The rating downgrade reflects the challenges Cunningham Lindsey faces from the relatively low volumes of catastrophe losses and other claims in recent years, leading to declines in profitability, interest coverage and cash flow coverage," Enrico Leo, Moody's lead analyst for Cunningham Lindsey, said in a news release.

"The company is taking steps to reduce costs and diversify its service offerings, but we regard the company's projected credit metrics as more consistent with a B3 corporate family rating."

Moody’s said the ratings reflect Cunningham Lindsey’s strong market position in claims management services and its diversified global customer base. The company manages claims across multiple jurisdictions for global insurers and self-insured entities – an offering that few competitors can match.

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