S&P: Safilo on developing watch

Standard & Poor's said it placed the B- long-term corporate credit rating on Safilo Group SpA on CreditWatch with developing implications, along with the CCC+ rating on its second-lien notes.

The recovery rating of 5 on the second-lien notes remains unchanged, indicating 10% to 30% expected default recovery.

The CreditWatch placement reflects an understanding that Safilo has not yet secured any long-term refinancing, S&P said.

Safilo's cash balances and undrawn committed long-term lines totaling €187 million as of Sept. 30, 2012 should just about cover the company's short-term debt, the agency said.

Safilo's 2015 revolving credit facility, of which €114 million was available on Sept. 30, 2012, can be used to repay the second-lien notes, following the 2010 debt restructuring, S&P said.

Without a refinancing, the agency said it believes that Safilo would likely be able to address its 2013 debt obligations, but liquidity thereafter would be very tight.

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