S&P lifts Levi Strauss view to positive

Standard & Poor’s said it affirmed its corporate credit rating on Levi Strauss & Co. at BB and revised the outlook to positive from stable.

S&P also affirmed its issue-level rating on the company’s $500 million senior unsecured notes due May 2025 and $525 million senior unsecured notes due May 2022 at BB and revised the recovery ratings on both to 3 from 4, which indicates an expectation for lenders to receive meaningful recovery (50% to 70%, in the upper half of the range) in the event of payment default.

“The outlook revision reflects our view that Levi Strauss could sustain lower debt leverage over the forecast horizon than we previously anticipated, largely as a result of improved gross margins. These improvements stem from cuts in product counts and moving the design center to the U.S. (from Turkey), which should strengthen its design and fashion capabilities while improving sell-through and speed to market,” said S&P credit analyst Peter Deluca in a news release.

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