Moody’s downgrades Lowell

Moody’s Investors Service said it downgraded the corporate family rating of Garfunkelux Holdco 2 SA (Lowell) to B3 from B2.

Moody's has also downgraded the local and foreign currency ratings assigned to the senior secured notes issued by Garfunkelux Holdco 3 SA to B3 from B2, and the foreign currency rating assigned to the senior unsecured notes issued by Garfunkelux Holdco 2 to Caa2 from Caa1.

The outlook was changed to stable from negative.

Moody's also withdrew the outlooks on Lowell's existing instrument ratings for its own business reasons. The withdrawal of these outlooks has no impact on the issuer-level outlook for Lowell.

The agency said the downgrade was driven by the company's continued weak profitability, with negative 0.8% return on assets for the last three quarters in 2018, the period including its Nordic acquisition, and EBITDA to interest expenses of 2.5x for the same period.

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