Moody’s: Emerald 2, Emerald 3 views to negative

Moody's Investors Service said it changed Emerald 2 Ltd.’s and Emerald 3 Ltd.’s outlooks to negative from stable.

Emerald 2 and Emerald 3 are a holding companies of Environmental Resources Management.

The agency also said it affirmed Emerald 2's B2 corporate family rating and B2-PD probability of default rating, as well as the B1 instrument ratings on Emerald 3's $754 million first-lien senior secured facilities due in 2021 and Caa1 instrument rating on the $175 second-lien secured facilities due 2022.

The outlook change reflects expectations that current soft trading with pressure on top-line and margins will result the company's financial leverage remaining at more than 7x, Moody’s said.

The ratings also consider the company's adequate liquidity profile supported by the high cash generative nature of its light capital expenditure business model, the agency said.

The ratings also take into account the company’s track record of resilient performance during last recession as a result of flexible cost structure, good geographic and sector revenue diversification and stable client base, Moody’s said.

The ratings are constrained by the company's exposure to the energy and commodity sector, the agency added.

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