Moody’s cuts Veregy unit’s loans, rates parent B3

Moody's Investors Service said it assigned a B3 corporate family rating and B3-PD probability of default rating to Veregy Intermediate, Inc.

Concurrently, Moody's downgraded the company's existing first-lien credit facilities issued at Veregy Consolidated, Inc., consisting of a $42.5 million revolver due 2025 and $248 million term loan due 2027 to B3 from B2.

Moody's also withdrew Veregy Consolidated's B2 CFR and B2-PD PDR ratings. Veregy Intermediate is the parent company and guarantor of Veregy Consolidated's debt.

The outlook is stable.

“The assignment of the B3 CFR and B3-PDR to Veregy Intermediate, Inc. is effectively representative of a one-notch downgrade of the company's CFR and PDR ratings and reflects Moody's view that earnings pressure will continue amid rising costs and lower than expected demand for the company's performance contract business, resulting in leverage remaining elevated above the previous downgrade indicator of debt to EBITDA of 6x through 2023,” the agency said in a news release.

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