Moody’s drops Elli Investments

Moody's Investors Service said it downgraded the corporate family rating and probability of default rating of Elli Investments Ltd. (Four Seasons Health Care) to Caa1 and Caa1-PD from B3 and B3-PD, respectively.

At the same time, the agency downgraded the rating of the super senior bank facility to B1 from Ba3 and the rating of the senior secured notes to B3 from B2; both of these instruments are borrowed at Elli Finance (UK) plc. The rating of the unsecured notes borrowed at Elli Investments was downgraded to Caa3 from Caa2.

The outlook is negative.

"The downgrade reflects Moody's expectation that earnings and cash flows in 2015 will remain depressed, and that barring a significant upturn in profitability, Moody's believes that there could be a significant cash burn in the coming 12-18 months," Richard Morawetz, Moody's vice president, senior credit officer and lead analyst for Four Seasons, said in a news release

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