S&P gives G-III notes BB+

S&P said it assigned a BB+ rating and 2 recovery rating to G-III Apparel Group Ltd.’s planned offering of $350 million of first-lien secured notes. The 2 recovery rating indicates S&P’s expectation for substantial (70%-90%; rounded estimate: 70%) recovery in the event of a default.

Proceeds will be used to repay its $300 million term loan due 2022 and keep about $42 million of cash on its balance sheet. S&P will withdraw the loan’s rating after it’s paid off. “We expect this transaction to be essentially leverage neutral, though it will also slightly improve the company’s already adequate liquidity position,” S&P said in a press release.

S&P also affirmed all its ratings on G-III, including the BB issuer rating, and removed them from CreditWatch with negative implications. S&P put the ratings on watch on April 3.

The outlook is negative.

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