Moody's cuts Aragon HoldCo

Moody's Investors Service said it downgraded Aragon HoldCo GmbH's (Amedes or the company) corporate family rating to B3 from B2 and its probability of default rating to B3-PD from B2-PD. The agency also lowered to B3 from B2 the instrument rating on the €135 million senior secured revolving credit facility and the senior secured term loan B, which has just been upsized to €820 million, from €740 million under Aragon BidCo GmbH.

“For 2023, Moody's forecasts an adjusted gross debt to EBITDA ratio of 7.3x and an adjusted free cash flow to debt ratio of -4.3% which are weaker than our expectations for the B2 rating. Although Moody's forecasts that Amedes will reduce the adjusted gross debt to EBITDA ratio towards 6x by 2025, driven by EBITDA-accretive acquisitions, operational synergies and organic EBITDA growth, this deleveraging is subject to execution risk,” Moody’s said in a press release.

Moreover, the agency said it projects Amedes to generate negative adjusted free cash flow until 2024.

The additional €80 million senior secured term loan B proceeds are expected to be used to fund future acquisitions and capex.

The outlook for these entities is stable.

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