3 July 2015 Insurance

CGSC on review for downgrade by Moody’s

Rating agency Moody’s has placed Cooper Gay Swett & Crawford (CGSC) on review for a downgrade.

Moody’s has also placed the B2 rating on CGSC's revolving credit facility and first-lien term loan and Caa2 rating on its second-lien term loan on review for downgrade.

The rating agency said CGSC was being placed on review because of the deterioration in EBITDA (earnings before interest, taxes, depreciation and amortisation), financial leverage and interest coverage metrics.

In the year prior to March 31, 2015, CGSC reported a decline in the EBITDA margin to about 13 percent as a result of weak organic growth in the group's international operations, particularly in London and Europe, which was mitigated by good performance in its North America segment, the rating agency explained.

“The review will focus on the timing and magnitude of the company's strategic initiatives to restore revenue and EBITDA growth, the impact of expense reduction and other restructuring initiatives, as well as prospective interest coverage and free cash flow generation to service debt,” said Moody’s.

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