S&P slices Jason two notches

S&P said it downgraded Jason Inc. two notches to CCC+ from B, citing continued poor performance for its second quarter and underperforming S&P’s previous forecasts for sales and profitability.

“The downgrade reflects our view that Jason's capital structure is currently unsustainable, which stems from our belief that further degradation of its profitability, amid difficult market conditions, increases the refinancing risk for its upcoming debt maturities,” said S&P in a news release.

Jason is selling its fiber solutions segment for net proceeds of about $75 million. It also hired advisers to help it explore options.

S&P also cut the rating on Jason’s first-lien credit facilities to CCC+ from B, leaving the recovery rating of 3 unchanged. The 3 recovery rating indicates S&P’s estimate for meaningful (50%-70%; rounded estimate: 50%) recovery in a payment default.

The agency cut the rating on Jason’s second-lien term loan to CCC- from CCC+. The recovery rating remains 6, indicating the agency’s expectation for negligible (0%-10%; rounded estimate: 0%) recovery in a payment default.

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