S&P rates G-III Apparel loan BB+

S&P said it assigned a BB- corporate credit rating to G-III Apparel Group Ltd.

The outlook is stable.

The agency also said it assigned BB+ rating and 1 recovery rating to the proposed $350 million first-lien term loan, which indicates 90% to 100% expected default recovery.

G-III Apparel is planning a $350 million first-lien term loan to partially finance its $650 million acquisition of Donna Karan International Inc. from LVMH Moet Hennessy Louis Vuitton, the agency said.

The company’s upsized $650 million asset-based revolving commitment and new $75 million junior secured seller notes are not rated.

The company's adjusted debt is estimated to be about $990 million at closing, which includes adjustments for operating leases, S&P said.

The agency said it estimates pro forma debt-to-EBITDA leverage will approach 4x upon completion of the transaction.

The ratings reflect the company’s diverse portfolio of apparel brands with good brand strength, mainly in women's wear, S&P said, and its participation in the highly competitive apparel industry.

The ratings also consider G-III Apparel's financial leverage of about 4x post-closing of the acquisition, which should gradually reduce in coming years, the agency said.

© 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.