Moody's downgrades Isagenix

Moody's Investors Service said it downgraded Isagenix International, LLC's corporate family rating to C from Caa2, probability of default rating to C-PD from Caa2-PD and first-lien senior secured revolving credit facility and term loan to Ca from Caa2.

“The downgrades reflect Isagenix's heightened liquidity and default risks, including the high potential for a distressed exchange given significant revenue and EBITDA declines and the amount of maturing debt due in the next nine months. The downgrades also reflect weak recovery prospects for Isagenix's creditors if there is a default. The company's ability to absorb inflationary costs and higher interest rates is challenging amid declining sales, leading to weakening operating cash flow, rising financial leverage, and an unsustainable capital structure,” Moody’s said in a press release.

Additionally, the agency noted Isagenix’s $19 million of cash on hand as of June 2022 is not enough to repay the $29 million of revolver borrowings and term loan amortization of $18.8 million over the next 12 months.

The outlook is negative.

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