Moody's downgrades Fortna

Moody's Investors Service said it downgraded its ratings for Fortna Group, Inc., including the corporate family rating to Caa1 from B3 and the senior secured term loan and revolving credit facility to Caa1 from B3.

“The ratings downgrades reflect Moody's expectation of modest free cash flow, a revenue decline and uncertain customer demand over the next several quarters. Despite improvements in cash collection, inventory levels and cost management, free cash flow will be limited due to higher interest expense than in years past. Declines in revenue due to deferrals and downsizing of customer projects, particularly in the parcel segment, are exacerbated by the uncertainty of when customers will increase investments in fulfillment operations and lower consumer spending,” the agency said in a press release.

The outlook remains stable.

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