S&P cuts KC Culinarte

S&P said it lowered the ratings for KC Culinarte Holdings LP and its first-lien facility to CCC from CCC+. The recovery rating remains 3.

“Our downgrade reflects KC’s weak operating performance and deteriorating liquidity position. Through the first three quarters of fiscal 2020, foodservice and national foodservice account revenues declined a combined 45% from the same prior-year period. We assess adjusted leverage in the double digits for the 12 months ended June 30, compared to about 6x last year, due primarily to a roughly 60% decline in adjusted EBITDA resulting from foodservice weakness and facility integration difficulties,” S&P said in a press release.

S&P noted the company is working to offset the losses through cost cuts, furloughing employees and lowering wages.

The outlook is negative.

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