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Prospect News home > News index > List of issuers G > Headlines for Gibson Brands, Inc. > News item |
S&P cuts Gibson loan recovery rating
S&P said it affirmed its B- issue-level rating on Gibson Brands Inc.'s $300 million senior secured first-lien term loan due August 2028, but revised the recovery rating to 4 from 3.
The lower recovery rating follows the company's recent asset-based loan facility upsize to $75 million from $50 million, the agency said.
“We revised our recovery rating on the first-lien term loan to 4 from 3 because of reduced recovery prospects in our hypothetical default scenario given the increased amount of priority debt in the capital structure. The 4 recovery rating indicates our expectation for average (30%-50%; rounded estimate: 45%) recovery for the loan holders in the event of default,” S&P said in a press release.
“We believe that Gibson is using the ABL upsize to proactively improve its liquidity position amid tougher macroeconomic conditions for consumer durables issuers,” the agency added.
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