Moody's slashes Schur Flexibles

Moody's Investors Service said it downgraded the corporate family rating of Schur Flexibles GmbH to Caa3 from B2 and its probability of default rating to Caa3-PD from B2-PD. Concurrently, Moody's the agency cut to Caa3 from B2 the ratings on the €475 million backed senior secured term loan due 2028 and on the €100 million backed senior secured revolver due 2027.

Moody’s said it also changed the outlook to negative from ratings under review. These actions conclude the review started on Feb. 18.

"The multi-notch downgrade follows the allegations related to compliance breaches and accounting fraud by Schur's former senior executives," said Donatella Maso, a Moody's vice president, senior analyst and lead analyst for Schur, in a press release.

"The company's EBITDA for 2020 and 2021 appears to be significantly inflated, leading to a sharp deterioration in credit metrics and an unsustainable capital structure, while the company needs to secure additional liquidity sources in the near term to avoid a default," added Maso.

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