Moody's downgrades Balta

Moody's Investors Service said it downgraded the corporate family rating of LSF9 Balta Issuer SA (Balta) to B2 from B1 and probability of default rating to B2-PD from B1-PD.

Moody's said it downgraded the senior secured rating assigned to the senior secured notes issued by Balta to B2 from B1.

The outlook was revised to negative from stable.

The ratings are driven by a further decline in revenue and profitability reported by Balta for third quarter of 2018, Moody's said.

As a result of the weak performance, the company's adjusted leverage increased to 6.1x as of September, which is materially higher than the 3.5x to 4.5x range expected for a B1 rating for Balta, the agency explained.

Key drivers of the negative trend include a weak U.K. residential market and raw material price increases, which Balta could not immediately pass on to its customers, Moody's said.

The ratings are constrained by the company's small scale and limited product and end-market diversification, the agency said.

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