Moody’s Investors Service has released the following news about its decision to downgrade Gibson’s Rating:
Moody’s Investors Service has downgraded Gibson Brands, Inc.’s Corporate Family Rating (CFR) to Caa2 from Caa1 due to increasing concerns about the company’s liquidity position. The rating outlook is negative.
The downgrade reflects Moody’s concerns about the company’s ability to meet all of its financial obligations in 2016 and 2017 that include over $80 million due to a consumer electronics supplier and $45 million in near-term outstanding indebtedness, if the ABL revolving credit facility is not refinanced. The expiration date of the ABL was recently accelerated to May 2017 from January 2018 because the company was in violation of a covenant. “However, we expect that the company will be able to refinance the ABL based on the strength of the underlying assets,” says Kevin Cassidy, Senior Credit Officer at Moody’s Investors Service.