S&P cuts Avanos revolver

S&P said it trimmed Avanos Medical Inc.’s $250 million senior secured revolving credit facility to BB from BB+.

The downgrade reflects the increase in the proportion of first-lien debt in Avanos’ capital structure after the repayment of the company’s senior unsecured notes partially funded with the revolver borrowings, the agency said.

The agency also revised the outlook to stable from negative and affirmed Avanos’ BB- rating.

“The rating affirmation and outlook revision reflect our expectation that the company’s operating results will continue to recover from the pandemic disruption over the coming quarters. It also reflects the improvement in adjusted leverage after the early repayment of the company’s $250 million senior unsecured notes,” S&P said in a press release.

S&P said it forecasts Avanos’ adjusted leverage to remain comfortably below 4x over the next few years.

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