Moody’s cuts Arvos facilities, view stable

Moody's Investors Service said it changed the outlook on Arvos Midco Sarl and Arvos Bidco Sarl to stable from positive.

At the same time, the agency affirmed the company’s B3 corporate family rating and B3-PD probability of default rating of Arvos.

Moody's also downgraded Arvos Bidco’s first-lien senior secured term loan B and senior secured revolving credit facility to B3 from B2.

Moody’s said the outlook change was driven by: (a) the company's weaker-than-expected operating performance during the first six months of the current financial year resulting in an estimated Moody's adjusted debt/EBITDA ratio of around 7 times as of September compared to 5.9 times as of March 2017; and by (b) the weakened liquidity profile as evidenced by a cash balance of €24 million as of September down from €40 million as of March 2017, lower expected cash flow generation in the upcoming quarters and reduced headroom under the springing covenant which, however, should not be tested in the upcoming quarters.

The outlook change triggered the downgrade of the first-lien instruments to the same level as the corporate family rating at B3 as described under structural considerations, the agency explained.

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