Moody’s trims Graanul

Moody's Investors Service said it downgraded Cullinan Holdco SCSp's (Graanul) long-term corporate family rating to B2 from B1, probability of default rating to B2-PD from B1-PD and the rating on the €630 million floating- and fixed-rate backed senior secured notes maturing October 2026 to B2 from B1.

The downgrade mirrors an agency forecast for weak spot prices caused by a glut of wood pellets and a weaker-than-expected demand pick-up due to relatively mild temperatures to push the company’s Moody's-adjusted gross leverage to around 9.6x for 2023 and 6.4x in 2024, the agency explained.

“Moody's expects the resolution of the customer dispute to stabilize earnings and cash flows for the latter months of 2023 and later periods, but Graanul will not benefit from retroactive application of new contractual terms that could have resulted in receipt of one-off payments,” the agency said in a press release.

The outlook remains negative.

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