S&P ups Quiksilver to B-, rates notes B+

Standard & Poor's said it raised its corporate credit rating on Quiksilver Inc. to B- from D, as it has emerged out of bankruptcy.

The outlook is negative.

At the same time, the agency assigned its B+ issue-level rating to the company's €200 million unsecured notes due 2017 and the new issuance of €136.484 million unsecured notes due 2020. Boardriders SA, a Luxembourg-based subsidiary, is the issuer of the notes. The recovery rating on each tranche is 1, which indicates an expectation for creditors to receive very high (90% to 100%) recovery in the event of payment default.

Adjusted debt was close to $500 million upon emergence, which includes our adjustments for operating leases.

S&P said the ratings reflect Quiksilver's post-emergence capital structure that cancelled debt of about $600 million, leaving debt-to-EBITDA leverage at about 12 times, which the agency expects to improve to the mid-6 times area over 2016.

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