S&P: Gibson Brands view now negative

S&P said it affirmed its CCC corporate credit rating on Gibson Brands Inc. and revised the outlook to negative from positive.

At the same time, the agency affirmed the CCC issue-level rating on the company's $375 million senior secured notes due August 2018. The 4 recovery rating remains unchanged, indicating an expectation for an average (30%-50%; rounded estimate 30%) recovery in the event of payment default.

S&P said the outlook revision to negative from positive reflects the increased risk that Gibson could default on its senior secured notes maturing in August 2018, as well as the very poor operating performance through the first six calendar months of 2017.

In addition to the note maturity, there is a July 23, 2018, springing maturity on Gibson's $55 million ABL, $70 million domestic term loan and $60 million international term loan if the senior secured notes are not extended or refinanced by that time.

The company's most recent financial statements include a going concern assumption surrounding the upcoming maturity of the senior notes as well as the springing maturity on the term loans and ABL if the notes are not addressed.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.