Moody's alters Aveanna view to negative

Moody's Investors Service said it changed Aveanna Healthcare LLC’s outlook to negative from stable, but affirmed all its ratings, including the B2 ratings on the senior secured revolving credit facility, term loan and delayed-term loan and the Caa2 rating on the senior secured second-lien-term loan.

Moody's also downgraded the speculative grade liquidity rating to SGL-3 from SGL-2

The rating action follows the company's announcement on Tuesday that it will be cutting its fiscal year 2022 EBITDA guidance to no less than $150 million from $190 million to $205 million. The agency said it now forecasts Aveanna's financial leverage to be more than 10 times for fiscal year 2022.

“The change in outlook to negative from stable reflects Moody's expectation that labor issues including wage inflation and recruitment challenges will continue to pressure the company's earnings and cash flow, resulting in very high financial leverage and a weaker liquidity position,” the agency said in a press release.

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