S&P changes HT Intermediate to positive

S&P said it revised its outlook on HT Intermediate Holdings Corp. to positive from stable and affirmed all ratings, including the B corporate credit rating.

The agency also affirmed the B issue-level rating on the secured notes. The recovery rating of 3 indicates moderate (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. S&P also affirmed the CCC+ issue-level rating on the senior unsecured notes. The 6 recovery rating indicates negligible (0% to 10%; rounded estimate: 0%) recovery.

"The outlook revision reflects our view that the combination of the recent proposed debt repayment, along with relatively good and stable operating performance, has increased the likelihood that we could raise the ratings in the next year if the company demonstrates a track record of less aggressive financial policies," S&P credit analyst Andrew Bove said in a news release.

"We believe good operating performance will be sustained over the next 12 months as the company continues to execute on merchandise and positions itself well to take advantage of pop-culture trends. However, we recognize that the possibility of a re-leveraging event still exists, and we would like to see the company establish a longer track record operating with sustained lower leverage before we would consider raising the rating."

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