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Moody's lowers Evergreen International Aviation
Moody's Investors Service said it downgraded Evergreen International Aviation, Inc.'s corporate family and probability-of-default ratings to Caa1 from B2, downgraded its senior secured bank credit facility to a range of Caa2 (LGD5) to B3 (LGD3) from a range of Caa1 (LGD5) to B1 (LGD3) and changed the loss-given-default rate of the facility to a range of 77% to 32% from a range of 79% to 33%.
The outlook was changed to negative from stable.
The agency said the downgrade reflects the weakening financial profile of Evergreen, which despite a long history of providing service to the U.S. government under an Air Mobility Command contract, has reported negative free cash flow and deteriorating financial metrics in recent periods. Moody's said it is particularly concerned about the proximity of the company to existing financial covenants, which may require Evergreen to obtain waivers and/or amendments in the near future.
The negative outlook reflects the agency's expectation that operating performance will remain below historic levels in the near term and could impair the company's ability to remain in compliance with financial covenants.
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