Moody’s reviews PFS for downgrade

Moody's Investors Service said it placed PFS Holding Corp.’s B2 corporate family rating, B2 (LGD3) rating on its $260 million senior secured first-lien term loan due 2021 and Caa1 (LGD5) rating on its $130 million second-lien term loan due 2022 under review for downgrade.

The review follows the company's second quarter earnings, which reflected dramatically deteriorated operating performance due to integration challenges faced with a recent acquisition, and loss of the right to distribute the Royal Canin product line. This has also negatively impacted the company's credit metrics and liquidity profile relative to what Moody's expected at the time the ratings were assigned.

"Based upon what we know today, the company's leverage exceeds 7 times, which is what we have laid out could contribute to a downgrade," Moody’s vice president and senior analyst Nancy Meadows said in a news release.

"As part of the review process, we will need to understand what the company's plans are to get credit metrics back in a range appropriate for the B2 rating."

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