S&P prunes Oriflame

S&P said it downgraded its ratings for Oriflame Investment Holding plc and its senior secured notes due 2026 to CCC from CCC+. The recovery rating on the notes remains at 3, indicating rounded recovery prospects of about 50%.

“The CCC rating reflects our view of an increased likelihood of the company considering a distressed exchange offer in the short term. The company announced the appointment of Rothschild & Co. to advise on potential refinancing options of its upcoming debt maturities,” the agency said in a statement.

S&P noted Oriflames’ notes are trading at distressed levels.

“In our view, the significant discount associated with the par value of the notes increases the probability of the company negotiating some form of subpar debt exchange. In line with our criteria, we would view any type of exchange offer whereby the lenders receive less than the original promise as a default,” the agency added.

The outlook is negative.

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