Moody's pares Proxiserve

Moody's Investors Service said it downgraded Financiere Groupe Proxiserve's corporate family rating to B3 from B2, its probability of default rating to B3-PD from B2-PD, and the rating on its senior secured term loan and the senior secured revolving credit facility to B3 from B2.

“Todays' downgrade was prompted by Proxiserve's persistently negative free cash flow (FCF) generation, which continued in 2022, and its increasing reliance on external funding, causing the liquidity to deteriorate to weak. In 2022, FCF generation remained negative for the third consecutive year (Moody's adjusted FCF estimated at around €-10 million in the same year), due to decreasing profitability, sustained capital expenditures of around €29 million and dividend payment.

“To offset the negative cash generation, the company progressively increased its gross debt outstanding over the last three years and increasingly relied on drawings of the committed senior secured RCF and on its factoring program, thus deteriorating the liquidity profile,” Moody’s said in a press release.

The outlook remains stable.

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