Artesyn Embedded Technologies Inc. Downgraded To 'CCC' From 'B-'; Debt Rating Lowered; Outlook Negative

Artesyn Embedded Technologies Inc. has reported negative operating cash flow for five of the last six quarters. The company's reported cash balance also declined to approximately $12 million from about $33 million a year ago. We believe Artesyn's weak operating performance and declining cash balance present a material risk that the firm may not be able to refinance its $115 million asset-based lending (ABL) revolver due in April 2020 or its senior secured notes due in October 2020. We are lowering our issuer credit rating on Artesyn to 'CCC' from 'B-' because we believe the company's capital structure is unsustainable and that there is meaningful risk of a distressed exchange or other restructuring actions over the next 12 months. In

...+ Artesyn Embedded Technologies Inc. has reported negative operating cash flow for five of the last six quarters. The company's reported cash balance also declined to approximately $12 million from about $33 million a year ago. + We believe Artesyn's weak operating performance and declining cash balance present a material risk that the firm may not be able to refinance its $115 million asset-based lending (ABL) revolver due in April 2020 or its senior secured notes due in October 2020. + We are lowering our issuer credit rating on Artesyn to '###' from 'B-' because we believe the company's capital structure is unsustainable and that there is meaningful risk of a distressed exchange or other restructuring actions over the next 12 months. + In addition, we are lowering our issue-level rating on the firm's senior secured notes to '###' from 'B-'. + The negative outlook reflects our view that Artesyn will be challenged to service its 2020 debt maturities without substantial improvement in its...

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