S&P rates Men’s Wearhouse CCC+

S&P said it gave the recently emerged from bankruptcy the Men’s Wearhouse LLC a CCC+ issuer rating. The agency also assigned a B rating to Men’s Wearhouse’s $75 million liquidity term loan facility maturing 2025 and CCC+ rating to its $365 million takeback term loan due 2025.

“TMW’s performance has been significantly depressed by the Covid-19 pandemic, and it will face continued operating pressure and uncertainty in recovering sales and EBITDA lost throughout 2021, leading to elevated leverage and volatile cash flow over the next 12 months. We forecast TMW’s revenue will improve in 2021 following about a 60% decline in fiscal 2020, but it will still be less than the company’s 2019 revenue,” S&P said in a press release.

The agency said it forecasts TMW’s S&P Global Ratings’ adjusted EBITDA will improve to about 11% in 2021 from negative in fiscal 2020.

S&P assigned a negative outlook. “The negative outlook reflects our belief that despite its improved capital structure, TMW will face operating performance pressure in the next 12 months, given significant uncertainty about the pace of sales and EBITDA recovery,” the agency said.

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