Moody’s lowers Covis

Moody's Investors Service said it downgraded Covis Finco Sarl’s first-lien bank credit facilities to Caa2 from B2 and the second-lien term loan to C from Caa2.

Concurrently, the agency lowered parent Covis Midco 2 Sarl’s corporate family rating to Caa3 from B3 and its probability of default rating to Caa3-PD from B3-PD and the senior secured bank credit facility rating and revised the outlook for both companies to negative from ratings under review.

“The downgrade of Covis' CFR to Caa3 from B3 reflects the severity of the year-to-date September 2022 declines in revenue and EBITDA of nearly 30% on a like-for-like basis. This continued drop in performance and Moody's expectation that a stabilization would not take place before 2024 have weakened the company's liquidity. While the rating agency expects that Covis will put in place significant mitigating plans, it forecasts that Moody's adjusted gross debt/EBITDA will remain above 10x in the long term,” the agency said in a press release.

The agency warned its views Covis’ capital structure as “unsustainable.”

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