S&P rates Cole Haan loan B

S&P said it affirmed the B issuer credit rating on Calceus Acquisition Inc. (Cole Haan) and assigned a B rating and 4 recovery rating to its proposed term loan.

The 4 recovery rating indicates 30% to 50% expected default recovery.

The ratings reflect an expectation that Cole Haan's operating performance will continue to improve with leverage decreasing to the low-4x range by the end of its fiscal 2019 and slightly lower than 4x in the following year due profitability improvement, S&P said.

The proposed refinancing transaction, which is relatively leverage neutral, eliminates refinancing risk related to the upcoming maturity of its existing term loan due in early 2020, the agency said.

The stable outlook reflects an expectation that the company will sustain its operational gains as it benefits from product innovation and lower promotional activities, S&P said.

Debt leverage is expected to improve to about 4x while its fixed-charge coverage ratio should strengthen toward the high-1x range, the agency said.

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