S&P gives Hanesbrands loans BBB-

Standard & Poor's said it assigned BBB- issue-level ratings to Hanesbrands Inc.'s new first-lien facilities.

The transactions include an amended $1 billion revolver (down from $1.1 billion), a new $425 million term loan A and a new $325 million term loan B. The 1 recovery rating on the new debt indicates an expectation that lenders would receive very high recovery (90%-100%) in the event of a payment default.

The company will use a portion of the transaction proceeds as a permanent financing source for newly acquired Knights Apparel and the remainder for general corporate purposes.

The revolver terminates in five years while the term loans A and B mature in five and seven years, respectively.

S&P said the ratings reflect Hanesbrands’ steadily improving credit metrics from ongoing operational improvements, contributions from Maidenform, DBApparel, and Knights Apparel, and improving global operations, as well as its participation in the highly competitive apparel industry. Liquidity is ample and there is no near-term maturing debt.

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