Moody's lowers Cleveland Unlimited to SGL-4

Moody's Investors Service said it lowered Cleveland Unlimited Inc.'s speculative-grade liquidity rating to SGL-4 from SGL-3 and placed its other ratings under review for possible downgrade, including the B3 probability-of-default rating, Caa1 corporate family rating and Caa1 (LGD4, 60%) senior secured regular bond rating.

The rating action follows the company's disclosure that it may need to restate its financial results for one or more prior periods and that the scope and magnitude of any potential restatement is currently uncertain. Moody's said this raises significant concerns over the adequacy of the company's internal control procedures and has heightened the agency's concerns over Cleveland Unlimited's liquidity position.

The company believes it has adequate liquidity to service its current debt and payment obligations and continue its business operations. However, a technical default under its senior secured indenture may arise from the late filing of its financial statements, the agency noted, and this could result in accelerated repayment of its $150 million senior secured notes, which the company does not otherwise have the committed resources to satisfy.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.