S&P rates Kate Spade loan B

Standard & Poor's said it affirmed its B corporate credit rating on Kate Spade & Co.

The outlook is stable.

In addition, the agency assigned its B secured debt issue-level rating to the company's proposed $400 million senior secured term loan due 2021. S&P also assigned its 3 recovery rating to the debt, indicating an expectation for meaningful (50% to 70%) recovery for noteholders in the event of a payment default.

The recovery rating reflects S&P's expectation for the size of the asset-based lending revolving credit facility to be reduced to $200 million from $350 million in conjunction with the company's plans to amend the facility. The agency expects the company to use the proceeds from the term loan to repay its 10½% senior secured notes due 2019.

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