Moody’s changes S4 Capital view

Moody's Investors Service said it changed the outlook on the ratings of S4 Capital plc's, S4 Capital LUX Finance Sarl and S4 Capital 2 Ltd. to negative from stable.

The agency also affirmed the Ba3 corporate family rating and a Ba3-PD probability of default rating for S4 Capital as well as the Ba3 ratings on the €375 million backed senior secured term loan B issued by S4 Capital LUX Finance and £100 million backed senior secured revolving credit facility issued by S4 Capital 2 and co-borrowed by subsidiaries, including S4 Capital Acquisitions 1 Ltd., S4 Capital Acquisitions 2 Ltd., S4 Capital Acquisitions 3 BV and S4 Capital US Holdings LLC.

Moody's said its decision to change the outlook to negative reflects the view that S4 Capital will likely fall behind the agency’s expectations for net sales and EBITDA for 2023 in comparison to its estimates at the time of assigning the ratings back in July 2021.

“S4 Capital's EBITDA margin has come under significant pressure in 2022, its acquisition related payment obligations are also high for 2022/23 resulting in significantly weak Moody's adjusted credit metrics for 2022,” the agency said in a news release.

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