S&P downgrades Magnate Worldwide

S&P said it lowered its ratings on Magnate Worldwide LLC and its first-lien debt to B- from B. The 3 recovery rating is unchanged, indicating meaningful (50%-70%; rounded estimate: 60%) recovery in default.

“We expect Magnate's operating performance to remain subdued amid a weak demand scenario that is likely to persist at least through the first six months of fiscal 2024. We expect Magnate's 2023 revenue to decline 38%-40%, driven by a steeper 55%-60% revenue decline in its international logistics services segment because it is experiencing significantly lower demand and more normalized pricing in its high-value, specialized and time-sensitive freight services line of operations,” S&P said in a press release.

The agency said it forecasts persistent restrained demand conditions and weaker freight rates through the rest of fiscal 2023 and at least the first six months of fiscal 2024 before starting to slowly improve as consumer demand recovers and inventories at retailers normalize.

The outlook is stable.

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