S&P rates Safilo loan B, notes CCC+

Standard & Poor's said it affirmed its B long-term corporate credit rating on Safilo SpA.

The outlook is stable.

At the same time, S&P said it affirmed its B bank loan rating on the group's €650 million senior secured credit facility maturing between 2009 and 2011 and its CCC+ subordinated debt rating on the senior notes maturing in 2013 issued by subsidiary Safilo Capital International SA and guaranteed by Safilo.

All ratings were removed from CreditWatch with negative implications, where they had been placed on Nov. 16, 2004, the agency noted.

The affirmation reflects Safilo's improved liquidity position following renegotiations with senior debt lenders, S&P added.

The agency said Safilo has obtained more flexible terms under the covenants of its senior credit facility up to the quarter ending June 2006 as well as a waiver for the March 2005 breach of its net debt-to-EBITDA senior debt covenant.

However, the rating continues to reflect Safilo's leveraged financial profile, limited free cash flow generation and exposure to adverse currency movements and license-renewal risk, S&P added.

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