Moody’s cuts Standard Profil

Moody's Investors Service said it downgraded automotive parts supplier Standard Profil Automotive GmbH's long-term corporate family rating to Caa1 from B3, the probability of default rating to Caa1-PD from B3-PD and the backed senior secured instrument rating to Caa1 from B3.

“The downgrade of the CFR to Caa1 reflects an extended period of time in which Standard Profil's operating performance and credit metrics did not meet the expectation for its previous B3 rating and Moody's concerns about the speed of Standard Profil's deleveraging to a more sustainable level, given the increased uncertainty of the business environment in which the company operates,” the agency said in a press release.

Moody’s pointed out that the company’s financial leverage hit 14.4x Moody's adjusted debt/EBITDA in 2021 (17.8x on an LTM 06/22 basis) compared to 13.5x and 9.7x in 2020 and 2019 respectively, too high for a B3 rating.

Additionally, Standard Profil has not posted positive Moody's adjusted free cash flow in the past four years, with the trend weakening each year to €64 million of negative free cash flow in 2021,

The outlook remains negative.

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