S&P rates Avon revolver BB-

S&P said it assigned a BB- rating and 1 recovery rating to Avon International Capital plc's newly executed €200 million multicurrency revolving credit facility due 2022.

The 1 recovery rating indicates 90% to 100% expected default recovery.

The new revolver replaces the company's existing $400 million revolving credit facility due June 2020.

The new revolving credit facility is a secured obligation that ranks pari passu with Avon International Operations Inc.'s $500 million senior secured notes due August 2022.

The revolver matures in 2022, but its credit agreement states that the facility will terminate 91 days prior to the maturity of the company's 4.6% senior unsecured notes due March 2020, the agency explained.

The agency said it believes that Avon will seek to refinance these notes in the near term.

Avon's capital structure also includes two other tranches of unsecured notes due in 2023 and 2043, and the ratings on those notes is unchanged.

The ratings reflect the company's participation in the increasingly competitive global beauty industry, its volatile operating trends and the difficulty it has faced in stabilizing its active representatives base, S&P said.

Avon's reliance on a direct-selling model and its operational inefficiencies made it challenging for the company to remain competitive, the agency explained.

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