Moody’s cuts Arena Luxembourg

Moody’s Investors Service said it downgraded Arena Luxembourg Investments Sarl’s corporate family rating and probability of default rating to B1 and B1-PD from Ba3 and Ba3-PD, respectively.

Also, Moody’s downgraded to B1 from Ba3 the rating of the senior secured notes issued by Arena Luxembourg Finance Sarl, the financing conduit of Arena. The notes have a loss given default assessment of LGD4.

“The downgrade of Arena’s ratings to B1 reflects Moody’s expectation that the increase in leverage that will result from the material loss of revenues and deterioration in operating performance in 2020 will lead to credit metrics no longer commensurate with our guidance for the Ba3 rating over the foreseeable future,” said Moody’s in a press release.

The agency revised the outlook to negative from stable. “The negative outlook reflects Arena´s rising credit risks due to the sharp decline in volumes as a result of the implementation of travel restrictions and confinement measures in Spain and Portugal,” the agency said.

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