S&P revises Visual Comfort view to stable

S&P said it revised the outlook for Visual Comfort & Co. to stable from negative and affirmed the B ratings on the company and its senior secured debt. The debt’s 3 recovery rating is unchanged and indicates an expectation for meaningful recovery (50%-70%; rounded recovery: 60%) in default.

“The outlook revision reflects a stronger than expected recovery in operating performance. Unlike past recessions, in this pandemic-driven downturn, consumers are reallocating greater discretionary dollars into home and remodeling projects away from travel and leisure,” S&P said in a press release.

The agency said it sees financial policy resulting in long-run leverage remaining over 5x.

“While Visual Comfort ended the third quarter with adjusted trailing-12-months leverage of about 4x, and we forecast adjusted leverage to remain there near term, Visual Comfort will maintain adjusted leverage of 5x-6x longer term due to its financial sponsor ownership,” S&P said.

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