S&P snips Elevate Textiles

S&P said it downgraded its ratings on Elevate Textiles Inc. and its first-lien credit facility to CCC+ from B-. The recovery rating remains 3, indicating an expectation for meaningful (50%-70%, rounded estimate: 50%) recovery in the event of a payment default.

The agency also lowered the rating on the second-lien term loan to CCC from CCC+. The recovery rating remains 5, indicating an expectation for modest (10%-30%, rounded estimate: 15%) recovery in the event of a payment default.

“The downgrade reflects the company's very high leverage, our expectation for negative cash flow generation, and reduced liquidity as a result of a material decline in demand because of the massive store closings due to the Covid-19 pandemic,” said S&P in a press release.

The outlook is negative.

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