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UPL Corporation (UPL) was downgraded to Ba1 from Baa3 by Moody’s, making it a fallen angel. The ratings on its 5.25% Perps was also downgraded by a notch to Ba3. The rating action follows the weak operating results posted by the company in 3Q 2024. During the quarter, the company’s revenue and EBITDA fell 28% and 86% YoY, causing its adjusted gross debt/LTM EBITDA leverage to spike to ~7x, from 4.8x as of September 2023. Moody’s expects UPL’s credit metrics to remain weak as a result of the downturn in the agrochemical industry and its working capital intensive business model along with weak liquidity due to heavy reliance on short-term financing.
UPL’s bonds traded stable with its 5.25% Perp at 78.3 cents on the dollar, yielding 25.9%