Moody’s cuts Ortho-Clinical, notes

Moody's Investors Service said it downgraded the ratings of Ortho-Clinical Diagnostics SA, including the corporate family rating to B3 from B2 and the probability of default rating to B3-PD from B2-PD.

The agency also downgraded the rating on the unsecured notes to Caa2 from Caa1.

The B1 rating on the senior secured credit facility was affirmed.

The outlook is stable.

Moody’s said the downgrade reflects higher leverage than expected at the time of the company's sale by Johnson & Johnson to the Carlyle Group in 2014.

The weaker-than-expected earnings and cash flow have also resulted in a weakening of liquidity. The agency anticipates weak free cash flow over the next 12 months and believes that access to the company's revolving credit facility will be limited by the covenant, which springs into effect when 30% of the facility is drawn.

Moody's forecasts very little cushion under the covenant should it be tested, therefore effectively limiting access to under $100 million of the facility.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.