Moody's lowers Covis

Moody's Investors Service said it downgraded Covis Finco Sarl’s currently outstanding $676 million equivalent backed senior secured first-lien term loans, split into a euro-denominated term loan and dollar-denominated term loan B, and the $100 million backed senior secured revolving credit facility to Ca from Caa1. The agency also lowered the $64 million backed senior secured first-lien term loan A to B3 from B1.

Concurrently, Moody’s cut the financing unit’s parent Covis Parent SCA to Caa3 from Caa1 and its probability of default rating to Ca-PD from Caa1-PD and revised the outlook on both companies to negative from stable.

“Despite the significant restructuring of the balance sheet completed in May 2023, Covis has continued to underperform compared to management's plan and Moody's expectations, particularly in relation to cash outflows, leading to renewed pressure on its liquidity. Moody's had expected Covis' sales and EBITDA to decline year on year mainly as a result of the withdrawal of Makena, and the impact of guideline changes and the acceleration of triple combination therapies on its COPD business,” the agency said in a statement.

Additionally, as of September, Covis had only $34 million of total available liquidity. “Absent restructuring or other mitigating actions it is likely that a liquidity shortfall will arise in early 2024,” Moody’s warned.

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