S&P ups Spencer Spirit

S&P said it raised SSH Holdings Inc. (Spencer Spirit) and its senior secured term loan to B+ from B. The agency also revised the loan’s recovery rating to 3 from 4, indicating an expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in bankruptcy.

“The upgrade follows Spencer Spirit’s strong sales and EBITDA growth amid a record Halloween season, which we anticipate will drive sustained credit metric improvement. Despite the ongoing Covid-19 pandemic, the company opened over 1,400 Spirit Halloween pop-up stores and increased segment sales by about 30% compared with the previous year,” S&P said in a press release.

The agency said it sees leverage in the mid-to-high-2x area and FFO to debt in the low- to mid-20% area, reflecting improvement in credit metrics relative to the previous forecast. S&P revised its financial risk profile assessment to significant from highly leveraged.

The outlook is stable.

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