Moody’s cuts Cenveo, notes

Moody's Investors Service said it downgraded Cenveo Inc.'s corporate family rating and probability of default ratings to Caa2 from Caa1 and Caa2-PD from Caa1-PD, respectively, and changed the outlook to negative from stable.

Debt instrument ratings at Cenveo Corp., a wholly owned subsidiary whose debts are guaranteed by Cenveo, were downgraded or affirmed as follows: senior secured first-lien notes cut to Caa1 from B3; senior secured second-lien notes cut to Caa3 from Caa2 and senior unsecured notes affirmed at Caa3.

The speculative grade liquidity rating was lowered to SGL-4 from SGL-3, indicating poor liquidity.

The actions result from Moody's opinion that Cenveo's May 2017 maturities are not refinance-able at par and need to be reconfigured ($190 million of Caa3-rated unsecured debt due and $49 million of exchangeable notes).

With debt/EBITDA in the 8 times range (Moody's adjusted, forecast for 2016), and with it being unlikely that material de-levering can occur over the next year, the agency said it believes that Cenveo's capital structure and liquidity arrangements are unsustainable and need to be substantially revised.

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