S&P: Edgewell Personal Care on negative watch

Standard & Poor’s said the ratings on Edgewell Personal Care, including its BBB- corporate credit rating, remain on CreditWatch with negative implications.

Upon a successfully completed spin-off transaction, including a $1 billion payment received to repay existing debt, S&P said it expects to lower the corporate credit rating on Edgewell Personal Care by one notch to BB+.

The agency also said it expects to lower the senior unsecured issue-level rating one notch to BB+ from BBB- and assign a 3 recovery rating, indicating 50% to 70% expected default recovery.

The spin-off of the household battery and portable lighting segment will further concentrate Edgewell’s business model and revenue stream, S&P said, and its revenue base will be less diversified.

The company has well-recognized personal care brands in the wet shave, sun and skin care, feminine care and infant care categories, the agency said.

But, it participates in a highly competitive and mature personal care landscape, where price point and value are paramount to consumers’ purchasing decisions, S&P said.

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