Moody's downgrades V.Group

Moody's Investors Service said it downgraded AI Mistral Holdco Ltd.'s (V.Group) corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD.

The agency said it downgraded the ratings of the first-lien facilities to B2 from B1. The facilities consist of a $57.5 million revolving credit facility due 2022, $515 million term loan due 2024 and $30 million acquisition term loan facility due 2022, all issued at AI Mistral (Luxembourg) Subco Sarl, a directly owned subsidiary of AI Mistral Holdco.

Moody's said it changed the outlook to stable from negative.

The company's adjusted debt-to-EBITDA ratio was high at 6.5x as of Sept. 30 on a pro forma basis after its recent acquisition of NRS, the agency said.

Moody's said it expects leverage to remain higher than 6x for the next 12- to 18-months despite improvements in profitability and modest organic revenue growth.

The ratings reflect the company's high leverage, lack of organic growth in revenue and dependence on key operational personnel, the agency said.

The ratings also consider its leading market position in the marine operations segment, Moody's said, and positive cash flow generation despite high exceptional expenses paid in cash.

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