Moody's slashes Cidron Gloria

Moody's Investors Service said it downgraded Cidron Gloria Holding GmbH's (GHD) long-term corporate family rating to Caa2 from B3 and its probability of default rating to Caa2-PD from B3-PD. Concurrently, the agency cut to Caa2 from B3 the rating of the €360 million backed senior secured term loan B maturing in August 2026 and the rating of the €80 million backed senior secured revolving credit facility due in February 2026, both issued by GHD Verwaltung GesundHeits GmbH Deutschland, a subsidiary of GHD. The outlook on both entities was changed to stable from negative.

“The downgrade is indicative of GHD's consistently weak credit metrics, including a high Moody's adjusted debt to EBITDA ratio of 9.5x, a poor interest coverage ratio of 0.9x, and limited free cash flow generation as of the end of December 2023. The company's 2023 performance demonstrated slower-than-anticipated recovery in the homecare division as well as limited margin improvement due to continued cost pressure,” the agency said in a statement.

Additionally, Moody’s noted it considers GHD’s capital structure as unsustainable.

However, “The stable outlook weighs the company's efforts to enhance operating performance against its weakening liquidity position and the heightened risk of default,” the agency said.

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