Moody’s prunes Praesidiad

Moody's Investors Service said it downgraded Praesidiad Group Ltd.'s corporate family rating to C from Caa3, and the company's probability of default rating to C-PD from Caa3-PD. Concurrently, Moody's also cut to C from Caa3 the backed senior secured bank credit facilities borrowed by Praesidiad Ltd., a wholly-owned subsidiary of the company. The agency also changed the outlook for both companies to stable from negative.

The downgrade of Praesidiad's CFR and PDR reflects Moody's view that the company's probability of default, including the potential for a restructuring that Moody's considers a distressed exchange, is very high over the near term,” the agency said in a press release.

The decision to downgrade follows Praesidiad's announcement Monday that disclosed it had entered a binding recapitalization agreement with key stakeholders. As part of the proposed transaction, current lenders will acquire the business from Praesidiad's ultimate private-equity sponsor Carlyle. The deal is expected to lop off €240 million in debt from about €397 million as of March 31.

“As part of the agreement, lenders will also provide €25 million of interim new money debt to support the company's liquidity position (€21 million as at March 31, 2023) through completion of the transaction. Notwithstanding the additional incoming funds, the rating agency does not rule out recourse to additional measures to preserve liquidity,” Moody’s said in a press release.

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