S&P trims Sun Products view to negative

Standard & Poor’s said it revised its outlook on the B- corporate credit rating on the Sun Products Corp. to negative from stable.

At the same time, S&P affirmed the ratings on the company, including the corporate credit rating as well as the B- rating on the company’s senior secured debt. The recovery rating on this debt remains 3, indicating an expectation that lenders could expect meaningful (50%-70%) recovery in the event of a payment default or bankruptcy.

S&P also affirmed the CCC rating on the company’s senior unsecured debt. The recovery rating on this debt is 6, indicating that lenders could expect negligible (0-10%) recovery in the event of a payment default or bankruptcy.

“Sun Products’ operating performance was below our expectations in the second quarter, resulting in our downward forecast revision for profits and credit metrics,” said S&P credit analyst Rodney Olivero in a news release. “The outlook change reflects our belief that intense promotional price competition in the laundry detergent space will remain through 2014 and into 2015, which could further reduce the company’s market share, weaken operating performance, and pressure already weak credit metrics.”

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