S&P cuts Ontex to negative

Standard & Poor's said it revised the outlook on Ontex IV SA to negative from stable.

At the same time, the agency said it affirmed the long-term corporate credit rating on Ontex at B+. The agency said it also affirmed the B+ issue rating on Ontex's €320 million 7½% senior secured notes due 2018 and €280 million floating-rate senior secured notes due 2018. The recovery rating on these instruments is unchanged at 4, indicating an expectation of average recovery prospects in the event of a payment default.

In addition, the agency said it affirmed the B- issue rating on the group's €235 million 9% senior unsecured notes due 2019. The recovery rating on these notes is unchanged at 6, indicating an expectation of negligible recovery prospects in the event of payment default.

S&P said the outlook revision reflects the deterioration in Ontex's credit metrics in the first nine months of 2011, and the agency's view that the group may not be able to restore its debt protection metrics to levels considered to be in line with the B+ rating in 2012.

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