Fitch cuts Knowlton Development

Fitch Ratings said it downgraded the issuer default ratings for Knowlton Development Corp. Inc. and Knowlton Development Holdco, Inc. to B- from B. Fitch also lowered the revolver and term loans ratings, which it plans to increase with a €100 million incremental term loan, to B- from B+. The agency revised the recovery rating to RR4 from RR3.

Knowlton Development’s downgrade reflects the expectation leverage will increase to close to 7x, driven by the plan to add debt to fund a $325 million shareholder distribution to its equity holders, including Cornell Capital, the agency said.

“The downgrade also reflects Fitch’s expectations for negative FCF in fiscal 2021 (fiscal year ending April 2021) and fiscal 2022, as the company is dramatically increasing capex for growth initiatives,” Fitch said in a press release.

The outlook is stable.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.