Moody's downgrades Atento

Moody's Investors Service said it downgraded to B2 from Ba3 Atento Luxco 1's corporate family rating and senior secured notes due 2026, guaranteed by Atento SA and certain subsidiaries. The outlook was changed to negative from stable.

The downgrade of Atento to B2 considers the deterioration in its liquidity profile. Despite the positive top-line trend and expectation of improving margins, large interest and hedge payments will maintain liquidity risk high through August 2023.

“Cash needs have been high for Atento with lower-than-expected EBITDA because of cyber-attack losses since October 2021 and lower-than-expected volumes in the first half of 2022. Additionally, cash flow generation was reduced with higher interest expenses and expenses relating to hedges which swapped currency risk to a floating rate based on the Brazilian base rate (Selic),” the agency said in a press release.

The weaker outlook indicates the risk of further erosion in Atento's liquidity profile, Moody’s said.

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