Moody's trims Sierra Enterprises

Moody's Investors Service said it downgraded Sierra Enterprises LLC's (owner of Lyons Magnus, LLC) corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD and first-lien revolving credit facility and first-lien term loan to B3 from B2.

“The downgrade reflects Moody's view that operating performance challenges will keep leverage elevated and liquidity weak over the next year. Moody's projects Sierra's EBITDA will remain relatively weak in the fiscal years ending September 2022 and September 2023 as inflationary headwinds impact margins and price increases lead to reduced volumes. In the first half of fiscal 2022, Sierra's EBITDA declined by over 70% compared to the first half of fiscal 2021. Although management implemented a number of price increases during the period, cost increases outpaced the company's price increases,” the agency said in a press release.

Moody’s said it expects Sierra’s performance to improve after next month.

The outlook is negative.

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