S&P downgrades Quiksilver, debt

Standard & Poor's said it lowered its corporate credit rating on Quiksilver Inc. to CCC+ from B-.

The outlook is negative.

Concurrently, the agency lowered the issue-level rating on the company's €200 million European senior unsecured notes due 2017 to CCC+ from B-. The recovery rating remains 4.

S&P also lowered the issue-level ratings on the $280 million senior secured notes due 2018 to CCC from CCC+. The recovery rating remains 5.

Lastly, the agency lowered the issue-level ratings on the $225 million senior unsecured notes due 2020 to CCC- from CCC. The recovery rating remains 6.

The ratings incorporate an analysis of Quiksilver Inc. on a consolidated basis, which includes QS Wholesale Inc. and Boardriders SA, the wholly owned subsidiaries.

As of the quarter ended April 30, S&P estimates the company had adjusted debt of roughly $1.2 billion.

"The downgrade reflects our expectations that Quiksilver's cash flow generation will remain negative and credit measures will not improve over the next several quarters as we had originally anticipated, primarily because of execution issues in its North American operations and unexpected pressure from foreign exchange headwinds," S&P credit analyst Ryan Ghose said in a news release.

"As a result, adjusted EBITDA declined approximately 55% for the 12 months-ended April 30, 2015, from the prior-year period, reflecting continued lower sales volume and a higher promotion activity."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.