Moody's lowers Klöckner Pentaplast view to negative

Moody's Investors Service said it changed the outlook on Kleopatra Holdings 2 SCA's (Klöckner Pentaplast) and subsidiary Klockner Pentaplast of America, Inc.'s ratings to negative from stable.

The agency also said it affirmed the B3 corporate family rating and B3-PD probability of default rating on Kleopatra Holdings 2, along with the B3 instrument ratings for the term loans and revolver at Klockner Pentaplast of America.

The outlook revision reflects the company's ongoing challenge to generating visible EBITDA growth in 2018 and considerable uncertainty regarding the magnitude and pace of de-leveraging in 2019, Moody's said.

Meaningful EBITDA growth and free cash flow improvements in 2019 are required to maintain the current ratings, the agency said.

The company's adjusted debt-to-EBITDA ratio is very high at 7.4x as of September 2018, Moody's added.

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