S&P drops Safilo to CCC+

Standard & Poor's said it lowered the long-term corporate credit rating on Safilo SpA to CCC+ from B- and the €195 million 9 5/8% senior subordinated notes due 2013 issued by Safilo Capital International SA to CCC from CCC+ with 5 recovery rating. Ratings remain on CreditWatch, where they were placed with negative implications on Feb. 13.

The actions reflect the view that the persistent downturn in discretionary consumer spending will continue to affect Safilo's operating performance and liquidity, according to the agency.

"In particular, the CreditWatch placement relays our concern over near-term debt service: Safilo's free operating cash flow could be insufficient to cover current short-term debt maturities," S&P analyst Diego Festa said in a statement.

On March 31, the annualized ratio of reported net debt to EBITDA was 5.6x.

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