S&P downgrades Cologix

S&P said it downgraded Cologix Holdings Inc. to B- from B.

The downgrades reflect anticipation that Cologix's financial performance will underperform the previous base-case expectations for 2019, which will lead the company to sustain leverage exceeding a 7.5x downgrade trigger for the next two years, S&P said.

The company is no longer expected to reduce leverage in 2019 because elevated selling, general and administrative costs and delays have slowed the company's earnings growth, the agency explained.

S&P said it is now uncertain whether the company will materially increase its revenue for 2020 and expects it to operate with sustained leverage that exceeds the 7.5x downgrade threshold through the year.

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