S&P cuts KNB to CCC-

S&P said it dropped the ratings for KNB Holdings Corp. and its first-lien term loan to CCC- from CCC+. The agency revised the recovery rating to 4, indicating expectations for average (30% to 50%, 35% rounded estimate) recovery in the event of a payment default, from 3.

“The downgrade reflects our expectation for constrained liquidity if store closures are prolonged, resulting in a near-term default or debt restructuring. The company's revenues and profitability will likely fall by at least the mid-double-digits since many of its specialty retail customers have temporarily shuttered operations because they have been deemed nonessential,” said S&P in a press release.

The outlook is negative.

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