Moody's trims Amer Sports

Moody's Investors Service said it downgraded to B3 from B1 the corporate family rating of Amer Sports Holding. Moody's also downgraded to B3-PD from B1-PD the company's probability of default rating and to B3 from B1 the ratings on the €1.7 billion term loan B and the €315 million revolving credit facility, both borrowed by Amer Sports' subsidiary Amer Sports Holding Oy. The outlook has been changed to negative from stable for both entities.

"The downgrade to B3 reflects the severe and protracted adverse impact that the coronavirus outbreak will have on Amer Sports' sales and earnings in 2020, resulting in a sharp spike in its already elevated leverage," said Igor Kartavov, a Moody's lead analyst for Amer Sports, in a press release.

"Weakening cash flow generation creates imminent risks for the company's liquidity, including a likely breach of its maintenance covenant and a possible cash shortfall in the second and third quarters of 2020," added Kartavov.

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