Moody’s downgrades KNB

Moody’s Investors Service said it downgraded KNB Holdings Corp.’s corporate family rating to Caa3 from Caa1 and the probability of default rating to Caa3-PD from Caa1-PD. Moody’s also downgraded the rating on the senior secured first-lien term loan to Caa3 from Caa1. The rating outlook is negative.

“The downgrades reflect KNB’s deteriorating operating performance, unsustainable capital structure and weak liquidity. KNB’s operating performance will continue to weaken over the next six to 12 months as a result of the coronavirus outbreak, which has resulted in some channel closures and a sudden recessionary environment with increasing unemployment levels in the U.S.,” Moody’s said in a press release.

Moody’s said it expects demand for KNB’s products to fall during the second and third quarters as the U.S. experiences recessionary pressure and consumers forgo discretionary purchases.

“Moody’s expects revenue and EBITDA to decline 20% to 25% during 2020 as demand for products sharply decline, previously implemented tariffs remain in place and retailers continue to right-size their inventory levels,” the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.