Moody’s Investors Service (“Moody’s”) appended a limited default “/LD” designation to Isagenix International, LLC’s (“Isagenix”) Probability of Default Rating (PDR), changing the PDR to C-PD/LD from C-PD.
The/LD designation reflects Moody’s view that Isagenix’s continued failure beyond the grace period to make its interest and principal payments that were due in September 2022 on its senior secured first lien credit facility is a limited default despite the company having entered into a forbearance agreement.
The limited default designation will remain until the company resolves the missed interest and principal payments. Isagenix’s Corporate Family Rating remains unchanged at C and the outlook remains negative.
Isagenix’s C Corporate Family Rating reflects the high likelihood of a debt restructuring based on the company operating under a forbearance agreement due to missed interest and principal payments due in September 2022. The company’s high leverage, refinancing risk driven by expiration of the revolving credit facility in June 2023, and weak operating performance as earnings continue to decline indicate the current debt structure is untenable.
Moody’s believes a deterioration in member base and weakening consumer demand is contributing to revenue declines, which combined with inflationary cost pressures is leading to significant EBITDA erosion.
Moody’s anticipates ongoing headwinds in the