Moody's lowers AFE

Moody's Investors Service said it downgraded AFE SA Sicav-RAIF's long-term corporate family rating to Caa2 from B3 on review for downgrade and its backed senior secured rating to Caa3 from Caa1 on review for downgrade. Moody's also changed the outlook to negative from ratings under review.

The action concludes the review for downgrade started on Dec. 19.

“The downgrade reflects AFE's constrained liquidity position and presently untenable capital structure, with a high risk in relation to the refinancing of its €307.5 million notes maturing in August 2024. The risks are further exacerbated by restricted access to capital markets and reduced prospects of debt issuances for non-investment grade issuers in the current high-rate operating environment.

“The downgrade also reflects the increased risk of a distressed exchange, which could arise from a potential debt restructuring,” Moody’s said in a press release.

AFE successfully extended its revolver’s maturity to December from June, but the renewal of the facility, which will take place next month, comes with a reduction in the credit limit to €60 million from €90 million. On March 31, there was about €79 million outstanding, which means AFE would have to pay €19 million to comply with the new limit.

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