While affirming Equifax’s senior unsecured rating at Baa1 and short-term rating at Prime-2, Moody’s Investor Services downgraded the company’s outlook from stable to negative due to the 2017 cyber-attack.
“The outlook revision to negative reflects weaker operating performance and credit metrics than originally expected following the cybersecurity breach in 2017,” the May 17 rating action notice stated.
“Free cash flow may remain around only $150 million per year for a few years, or less than half of annual free cash flow prior to the breach,” said Edmond DeForest, Moody’s vice president and senior credit officer. “Diminished free cash flow limits Equifax’s ability to reduce its financial leverage,” he continued.
Infosecurity Magazine reached out to Equifax for comment in reaction to the news that was reported May 23 by CNBC. An Equifax spokesperson wrote in an email, “Moody’s affirmed our Baa1 senior unsecured rating and the short-term rating at Prime-2. Any questions about the outlook change should be directed to Moody’s. EFX remains solidly investment grade and the revision in Moody’s outlook will not impact our internal investments, including new products, our $1.25bn EFX2020 technology and security advancements, or future acquisitions.”