Moody’s cuts Mobileum

Moody's Investors Service said it downgraded Matrix Parent, Inc.'s (Mobileum) corporate family rating to Ca from Caa3, its probability of default rating to D-PD from Caa3-PD/LD, its senior secured first-lien bank credit facilities to Caa3 from Caa2 and senior secured second-lien term loan to C from Ca. The outlook was changed to stable from negative.

On Dec. 11, Mobileum posted a notice of default for the missed payment on its first-lien term loan. On Dec. 14, the company entered a waiver agreement with its first-lien and second-lien lenders. Under the agreement, lenders agreed to temporarily waive events of default including missed interest payments, failure to maintain proper books of record, and delivery of incorrect or misleading financial statements. The waiver expires on Jan. 31. Moody's said it considers the missed payments as a default.

“The downgrade of the CFR to Ca reflects Moody's expectation that Mobileum's operating performance will continue to be pressured and liquidity will further deteriorate over the next 12 months. Moody's views Mobileum's capital structure as unsustainable and believes that the company has limited financial flexibility to execute a meaningful operational turnaround driven by subpar operating performance, macroeconomic challenges, and weak liquidity.

“Mobileum's ratings also reflect a high probability of a debt restructuring as the company continues to negotiate with lenders to pursue a more sustainable capital structure,” The agency said in a press release.

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