S&P cuts KC Culinarte

S&P said it lowered its ratings on KC Culinarte Holdings LP and its first-lien term loan and revolver to B- from B. The recovery rating remains 3.

“Our downgrade reflects the company's elevated leverage, minimal free cash flow generation, and potential liquidity risk if operational missteps persist. The downgrade reflects the company's EBITDA deterioration and higher-than-expected borrowings on its revolver due to integration challenges with its Everett, Wash. plant. We estimate that leverage increased above 8x for the fiscal year ended Sept. 30, 2019, compared with our prior expectation of below 7x. We forecast that leverage will remain high during the next 12 months as we anticipate for a longer-than-budgeted Everett facility turnaround. We also forecast no free cash flow generation for fiscal 2020,” S&P said in a press release.

The outlook is negative.

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