S&P trims KNS, eyes downgrade

S&P said it lowered its ratings for KNS Holdco LLC, its revolver and senior secured term loan to B- from B. The recovery rating is 3, indicating meaningful (50%-70%; rounded estimate: 65%) recovery in default. The agency placed all its KNS ratings on CreditWatch with negative implications.

“U.S.-based KNS Holdco LLC reported operating performance weaker than we expected through the third quarter of 2023, including year-to-date S&P Global Ratings-adjusted EBITDA deteriorating by 8%, leading to negative free operating cash flow (FOCF), trailing 12-month interest coverage of 1.2x, and leverage of 7.7x,” S&P said in a press release.

The agency warned it could lower the rating if it decides after further review that KNS will not be able to raise its S&P Global Ratings-adjusted EBITDA enough to cover its interest expense by 1.5x or more.

S&P said it aims to resolve the negative watch in January.

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