S&P cuts Halo Buyer

S&P said it downgraded Halo Buyer Inc.’s issuer rating to CCC+ from B- and its first- and second-lien debt to CCC+ and CCC-, respectively. The recovery ratings are unchanged.

“Our downgrade reflects Halo's continued underperformance leading to elevated leverage and deteriorating liquidity, factors we expect could persist into 2022. Halo's gross profit dropped by more than 100 basis points (bps) in the last 12 months (LTM) ended the third quarter 2021, compared to the same period in 2020. Although the company's top line is growing mainly from acquisitions and from organic growth to a lesser extent, its margin profile is shrinking,” S&P said in a press release.

The agency said Halo Buyer’s adjusted leverage stood at about 9x as of the LTM ended Sept. 30, 2021, above its previous forecast for S&P Global Ratings-adjusted leverage in the high-7x to low-8x area.

The outlook is negative.

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