S&P lowers Bacardi to negative

Standard & Poor’s said it affirmed the ratings on Bacardi Ltd., including its BBB+ long-term corporate credit rating and A-2 short-term corporate credit and commercial-paper ratings.

The agency also said it revised the company’s outlook to negative from stable.

The outlook revision reflects the risk that recent weak operating performance may not improve earnings enough to restore credit measures to levels that support the BBB+ rating, S&P said.

The company has taken material one-time restructuring costs which, together with weak volume performance, led to EBITDA-margin declines of about 28% in fiscal 2015, resulting in a debt-to-EBITDA ratio of about 3x, the agency said.

S&P said the company’s operating performance will modestly improve over the next 12- to 24-months, in part due to one-time restructuring costs and improved EBITDA margins from the company’s restructuring efforts.

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