Moody’s downgrades Unit4

Moody’s Investors Service said it downgraded to B3 from B2 the corporate family rating of AI Avocado Holding BV (Unit4) and its probability of default rating to B3-PD from B2-PD.

Moody’s also lowered the senior secured revolving credit facility and the senior secured term loans issued by AI Avocado BV to B3 from B2.

“The downgrade of Unit4 reflects the company’s underperformance in 2019 as well as Moody’s expectation that Moody’s adjusted gross leverage will remain elevated, and that free cash flow generation will remain limited over the next 12-18 months,” said Fabrizio Marchesi, a vice president and Moody’s lead analyst for the company, in a press release.

“The rating also reflects the negative impact that the coronavirus outbreak is expected to have on the company’s financial performance mainly because a portion of its revenue is linked to the sale of new licenses and services,” added Mr. Marchesi.

The outlook remains stable.

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