S&P lowers Safilo

Standard & Poor's said it lowered to CC from CCC+ the long-term corporate credit rating on Safilo SpA and to C from CCC the issue rating on the €195 million 9 5/8% second-lien notes due 2013 issued by Safilo Capital International SA with 5 recovery rating.

The outlook is negative. Ratings were removed from CreditWatch, where they were placed with negative implications on Feb. 13.

According to the agency, the downgrade reflects Safilo's discussion with senior lenders regarding a covenant amendment and a deferral of the June 30 payment of the amortizing facility A of its senior bank loan due in December 2011.

"In our view, this request reflects Safilo's increasingly fragile position due to ongoing operating underperformance and the need to secure its liquidity position," S&P analyst Diego Festa said in a statement.

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