Moody's downgrades Zywave loans

Moody’s Investors Service said it downgraded Zywave’s (Cardinal Parent Inc.)’s senior secured first-lien debt, which includes a $70 million revolver and an about $540 million term loan, to B3 from B2 and $228 million senior secured second-lien term loan rating to Caa3 from Caa2.

The agency also assigned Packers Software Intermediate Holdings, Inc. a Caa1 corporate family rating and a Caa1-PD probability of default rating and withdrew Cardinal’s B3 CFR and B3-PD PDR. Together the companies are Zywave.

“Today's ratings actions are the result of Zywave's very high debt leverage that Moody's anticipates will remain above 9x, Moody's expectation for negative cash flow in 2023 and Zywave's weak liquidity profile. As a result, Moody's sees a risk of default if the company is unable to reverse cash burn or improve margins. Moody's expects cash flow to remain challenged over the next 12-18 months as a result of a substantially increased interest expense burden and for liquidity to remain weak,” the agency said in a press release.

The outlook is stable.

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