Moody's downgrades Storskogen

Moody's Investors Service said it downgraded Storskogen Group AB's corporate family rating to B1 from Ba3 and its probability of default rating to B1-PD from Ba3-PD. Moody's also changed the outlook to negative from ratings under review. This concludes the review initiated on Oct. 26.

“The downgrade of the CFR to B1 incorporates Storskogen's somewhat aggressive liquidity management approach. The company is addressing upcoming maturities simultaneous with its plans to undertake operational improvements, all during a macro environment of sluggish growth, high-interest rates, tight financing conditions, and lower valuations in equity markets and real estate.

“The extension of its revolver and term loan provides Storskogen with adequate liquidity for the next two years, but Moody's anticipates the company will need to access capital markets in the first half of 2024 to address maturities in 2024 and 2025 unless upcoming maturities can be covered with sizeable working capital releases and divestiture proceeds,” the agency said in a press release.

The negative outlook reflects the execution risks for refinancing upcoming debt maturities, divestitures, and the ability to implement cash-enhancing optimization measures, Moody’s said.

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