Moody’s drops Onorato, moves ratings to Moby

Moody's Investors Service said it downgraded Onorato Armatori SpA's (Moby) corporate family rating to B1 from Ba3, probability of default rating to B1-PD from Ba3-PD and €300 million worth of senior secured notes to Ba3 from Ba2.

The outlook was changed to negative from stable.

In addition, the agency moved all the ratings assigned to Onorato Armatori to Moby SpA. Following the reverse merger completed on Aug. 8 where Onorato Armatori was merged into Moby, the latter has become the top entity of the restricted group and is the financial reporting entity of the group.

As such Moody's, assigned a B1 corporate family rating and B1-PD probability of default rating with a negative outlook to Moby, and will subsequently withdraw the B1 corporate family rating and B1-PD probability of default rating assigned to Onorato Armatori.

The Ba3 rated senior secured notes will be assumed by Moby.

"The downgrade reflects Moby's deteriorating operational performance in 2016 which has translated into a higher leverage, including Moody's adjustments, well beyond what we previously anticipated when we first assigned ratings to the company," Guillaume Leglise, Moody's analyst and lead analyst for Moby, said in a news release.

"The negative outlook reflects our expectations that Moby's earnings will continue to face headwinds from the very competitive environment, which will impede the recovery in the company's financial profile over the next 12 to 18 months."

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