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Moody's decision to downgrade Jafz was driven by the high uncertainties over the near- to medium-term evolution of the company's capital structure, which the rating agency assesses as being highly leveraged, with adjusted debt to EBITDA at 8.6 times (as per the 12-month period ending June 2010), and as unsustainable given the company's cash flow profile.
Moreover, Moody's considers it likely that the company's capital structure will remain constrained. These factors have prompted Moody's to reposition Jafz's baseline credit assessment (BCA) to 16 (equivalent to B3 on Moody's global scale) from 14 (B1 equivalent), hence the downgrade.