Moody's downgrades Prosol

Moody's Investors Service said it downgraded to B3 from B2 the corporate family rating and to B3-PD from B2-PD the probability of default rating of ZF Invest (Prosol). Concurrently, Moody's trimmed to B3 from B2 Prosol's €1.382 billion senior secured term loan due 2028 and the €250 million senior secured revolving credit facility due 2028.

“The downgrade of the CFR to B3 reflects a sharp decrease in profitability resulting from price investment and reducing volumes in the first half of 2022 in addition to growing cost inflation and loss-making new format openings. This has resulted in a significant EBITDA reduction as of June 30, 2022, and very high leverage, with Moody's-adjusted (gross) debt/EBITDA estimated to be around 11.9x for the fiscal year ending September 2022 (fiscal 2022). Excluding the €189 million outstanding convertible bond, leverage is forecast to be 10.9x in fiscal 2022,” the agency said in a press release.

The outlook remains stable.

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