S&P cuts Careismatic Brands

S&P said it lowered its ratings for Careismatic Brands (New Trojan Parent Inc.) and its first-lien debt to B- from B. The agency also trimmed the second-lien debt to CCC from CCC+. The 3 first-lien and 6 second-lien recovery ratings are unchanged.

“The recalibration away from elevated pandemic demand and high costs have damaged New Trojan's credit ratios and cash flow. Multiple headwinds have caused New Trojan's financial performance to weaken well below our prior expectations. We estimate the company's organic sales in the first half of 2022 fell by a mid-single-digit percentage rate, reflecting consumer spending behavior shifting back to pre-pandemic habits, retailer destocking amid high inventories across the store and a general consumer pullback, and intense competition,” S&P said in a press release.

The agency said it estimates the issuer’s adjusted leverage reaching 13x by the end of the year before narrowing to 9x in 2023.

The outlook is negative.

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