Moody's lowers City Brewing

Moody's Investors Service said it downgraded City Brewing Co., LLC's corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD, and the rating on the company's senior secured bank credit facilities to B3 from B2.

“The downgrade to B3 was prompted by a slower than anticipated recovery after the events of 2021, when results deviated materially from original growth and cash flow expectations as expansion in the hard seltzer market slowed, leaving excess inventory in trade channels for City's largest customers,” Moody’s said in a press release.

“Moody's now expects pro forma debt to EBITDA leverage (including Moody's adjustments) to end full-year 2022 at above 10x, compared with around 6x expected at the time of the last downgrade. While Moody's expects EBITDA to begin to improve in 2023, leverage will remain high at over 7.5x, a level that is more consistent with a B3 CFR given the company's operating profile,” the agency said.

The outlook is negative.

© 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.