Moody's cuts Health and Happiness

Moody's Investors Service said it downgraded Health and Happiness (H&H) International Holdings Ltd.'s corporate family rating to Ba3 from Ba2 and senior unsecured rating to B1 from Ba3. Moody's has also changed the outlook to stable from negative.

"The downgrade reflects our expectation that H&H's leverage will stay elevated over the next 12-18 months, post its debt-funded acquisition and amid a continued challenging operating environment," said Shawn Xiong, a Moody's assistant vice president and analyst, in a press release.

"Although the recently announced $1.2 billion refinancing facilities will significantly strengthen H&H's liquidity position, the substantial debt taken as a result of the Zesty Paws acquisition, combined with deterioration in margins, will make the company's deleveraging towards 3.5x-4x unlikely over the next 12 to 18 months," added Xiong.

However, Moody’s does forecast revenue will rise 8%-11% for 2022, and its adjusted EBITDA margin will remain around 15% over the next 12-18 months.

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