Moody’s revises CPI view to stable

Moody's Investors Service said it affirmed the B1 corporate family rating and B1-PD probability of default rating of CPI Holdings I, Inc., as well as the B1 ratings on the senior secured credit facilities of CPI Acquisition, Inc., the debt issuing subsidiary of CPI.

The agency assigned a speculative grade liquidity rating of SGL-2.

The outlook was revised to stable from positive.

Moody’s said the change in outlook reflects its expectation that revenue predictability will remain uncertain over the next several quarters due to the recent adverse market trends that have negatively impacted the sale of EMV chip payment cards this year.

The agency expects high single-digit revenue declines for CPI in 2016 as the company continues to sell substantially fewer EMV cards than originally anticipated at the time of the initial public offering in October 2015.

The revenue shortfall is due to larger than expected unissued EMV cards stocked in inventory of CPI's largest customers. The oversupply of cards has resulted in pricing pressure, further weighing on sales.

Moody's said it expects banks to continue to curtail purchases of EMV cards through 2016 as they reduce their inventory before returning to normal spending patterns in 2017.

© 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.