EmployBridge LLC Ratings Placed On CreditWatch Negative Due To Potential Fallout From The Coronavirus Pandemic

  • We expect that the temporary staffing industry will see reduced demand as the U.S. unemployment rate increases because of the economic slowdown stemming from the coronavirus pandemic.
  • EmployBridge LLC's concentration in the light industrial and manufacturing sectors leaves it especially vulnerable, though the extent and duration of the coronavirus pandemic's effects on the company's profit and leverage are uncertain. We believe the company's full-year 2020 EBITDA losses due to the pandemic could be material, pressuring liquidity and increasing leverage above our 5.5x downgrade threshold for the current rating.
  • We are placing all of our ratings on EmployBridge, including our 'B' issuer credit rating, on CreditWatch with negative implications.
  • In resolving the CreditWatch placement, we will evaluate any information we receive regarding the spread of the coronavirus and its effects on EmployBridge's demand, liquidity, and debt leverage.
NEW YORK (S&P Global Ratings) March 27, 2020—S&P Global Ratings today took the rating actions listed above. The CreditWatch placement reflects EmployBridge's vulnerability to an economic downturn stemming from the coronavirus pandemic and our uncertainty about the duration and extent of the outbreak. U.S. companies are increasingly closing their manufacturing facilities and laying off workers. According to the U.S. Department of Labor, the number of new jobless claims filed by individuals seeking unemployment benefits rose to 3.28 million as of March 26, 2020, from 281,000 the previous week. We are also unsure when the conditions in the labor market will return to normal. Temporary staffing companies, such as EmployBridge, can face immediate and significant consequences from turmoil in the labor market because of the low cost associated with terminating temporary workers.
In resolving the CreditWatch placement, we will evaluate any information we receive regarding the spread of the coronavirus and its effects on EmployBridge's demand, liquidity, and debt leverage.
We could lower our rating on the company if we believe the pandemic will cause its leverage to increase or materially reduce its liquidity.
We could remove our ratings from CreditWatch and affirm them once we are more confident about the duration and severity of the pandemic's effects on EmployBridge's demand, operating performance, liquidity, and cash flow. We would need to be confident that the company's revenue will not decline by more than 10%, its debt leverage will remain below 5.5x, and it will maintain sufficient liquidity--including remaining in compliance with its covenant--before we would affirm our rating.
We work across the world

From London to San Francisco, to our home base in (Saint Helier) Jersey, we’re looking for extraordinary and creative scientists to help us drive the field forward.

Disclaimers: AC Investment Inc. currently does not act as an equities executing broker or route orders containing equities securities. All data and information is provided “as is” for personal informational purposes only, and is not intended for trading purposes or advice. Please consult your broker or financial representative to verify pricing before executing any trade.

77 Massachusetts Avenue Cambridge, MA 02139 617-253-1000 pr@ademcetinkaya.com