S&P changes Southwire to negative

S&P said it affirmed its BB corporate credit rating on Southwire Co. LLC and revised the outlook to negative from stable.

At the same time, the agency affirmed the BB+ issue-level rating on the company's term loan due 2021. The recovery rating remains 2, indicating an expectation for substantial (70%-90%; rounded estimate: 70%) recovery in the event of a payment default.

S&P said the negative outlook reflects the potential for a lower rating over the next six to 12 months if the company is unable to refinance its $1 billion asset-based lending facility due February 2019.

“Even so, we continue to expect modest improvement in Southwire's operating results and credit measures over the next 12 months, with adjusted debt to EBITDA between 2x-2.5x and FFO to debt of roughly 30%,” the agency said in a news release.

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