S&P affirms WKI Holding on deal termination

S&P said it affirmed the B corporate credit rating on WKI Holding Co. Inc., along with the B ratings on subsidiary World Kitchen LLC's $90 million senior secured revolving credit facility due in March 2018 and $241 million term loan B due in March 2019.

The 3 recovery rating, which indicates 50% to 70% expected default recovery, is unchanged.

The outlook is stable.

The agency also withdrew the B corporate credit rating to the previously proposed parent company, World Kitchen Group Inc. , along with the B rating assigned to WKI's proposed $275 million senior secured term loan B due in 2023.

WKI Holding Co. Inc. is no longer being acquired by a special-purpose acquisition company owned by the private-equity arm of GP Investments Ltd., S&P explained.

The company remains majority owned by its existing financial sponsors, the agency said.

The sponsors, W Capital and Oaktree, could make capital allocation decisions that will restrict the company from sustaining leverage of less than 5x, S&P said.

The agency also said it believes W Capital and Oaktree will likely seek another buyer or take a leveraged dividend in the near term.

The ratings also reflect that the company’s year-to-date operating performance through the third quarter ended Sept. 30 has been slightly below prior expectations because of lower sales across all of its regions, S&P added.

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