Moody’s downgrades GreenSky

Moody’s Investors Service said it downgraded GreenSky, Inc.’s corporate family rating to B2 from B1 and probability of default rating to B2-PD from B1-PD. The senior secured credit facility rating was downgraded to B2 from B1. Moody’s assigned a speculative grade liquidity rating of SGL-2. The agency changed the outlook to negative from stable.

“The action reflects the weakening of the company’s credit profile over the course of 2020 and expected continued weakness in 2021. While historically in benign credit and interest rate environments the company was highly earnings and cash flow generative, the recent difficult macroeconomic environment has driven a significant increase in loan costs and balance sheet investment requirements, pressuring margins and reducing cash flow generation,” Moody’s said in a press release.

The outlook reflects an expectation of continued EBITDA margin compression and limited free cash flow generation in 2021, with the potential for an improvement in 2022, Moody’s said.

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