Research Update: IBC Capital Outlook Revised To Negative On Thinning Liquidity And Deteriorating Business Prospects; 'B' Rating Affirmed

Disruptions in the automotive industry exacerbated by the COVID-19 pandemic will depress IBC Capital Ltd.'s (Goodpack) earnings over the next 12 months, at a time of sustained investments. We now forecast negative to minimal free operating cash flows for the container lessor through fiscal 2022, with adjusted debt-to-EBITDA rising above 7x. In parallel, we see escalating pressure on the Cayman Island-incorporated company's liquidity, as the maturity on its revolving credit lines in March 2021 draws near. On June 16, 2020, S&P Global Ratings revised the outlook on Goodpack to negative from stable. At the same time, we affirmed our 'B' long-term issuer credit rating on the company. We also affirmed all our ratings on the company's debt. The negative outlook

...- Disruptions in the automotive industry exacerbated by the COVID-19 pandemic will depress IBC Capital Ltd.'s (Goodpack) earnings over the next 12 months, at a time of sustained investments. - We now forecast negative to minimal free operating cash flows for the container lessor through fiscal 2022, with adjusted debt-to-EBITDA rising above 7x. - In parallel, we see escalating pressure on the Cayman Island-incorporated company's liquidity, as the maturity on its revolving credit lines in March 2021 draws near. - On June 16, 2020, S&P Global Ratings revised the outlook on Goodpack to negative from stable. At the same time, we affirmed our 'B' long-term issuer credit rating on the company. We also affirmed all our ratings on the company's debt. - The negative outlook indicates the prospects of rising liquidity risks for Goodpack's maturing revolving credit lines and weakening leverage due to a protracted recovery in the automotive industry....

Research Update