Moody’s trims Golden State Buyer

Moody’s Investors Service said it downgraded Golden State Buyer, Inc.'s senior secured bank credit facility rating to B2 from B1 and the second-lien senior secured term loan rating to Caa2 from Caa1. The issuer is the borrowing entity for Golden State Medical Supply, Inc. The agency also lowered Golden State’s corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD.

“The ratings downgrade reflects Moody's expectation for ongoing operational headwinds, in particular margin contraction, driven by growing competition from generic pharmaceutical manufacturers, to persist over the next 12-18 months. As a result, Moody's expects financial leverage will be sustained above 6x, into 2024,” the agency said in a press release.

Additionally, the lower ratings mirror an erosion in Golden State’s liquidity, reflected in a decline in free cash flows and the upcoming maturity of the revolving credit facility in June 2024, Moody’s noted.

The outlook is stable.

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