TEXT-S&P raises Springs Window Fashions term loan rating to 'B+'

Tue Nov 20, 2012 1:20pm EST

Related Topics

Nov 20 - Standard & Poor's Ratings Services today raised its issue-level
ratings on Springs Window Fashions LLC's $356.5 million first-lien debt one
notch to 'B+' (one notch above the corporate credit rating) from 'B'. At the
same time we revised the recovery ratings on this debt to '2', indicating our
expectations for substantial (70% to 90%) recovery in the event of a payment
default, from '3', reflecting the company's reduced debt levels from required
amortization and an excess cash flow sweep.  

The 'B' corporate credit rating on Springs Window remains unchanged, as do the 
'CCC+' issue-level ratings on the company's $125 million second-lien term 
loan. The recovery rating on the second-lien term debt remains '6', indicating 
our expectation for negligible (0% to 10%) recovery in the event of a payment 
default. 

The ratings on Springs Window reflect our view of the company's "highly 
leveraged" financial risk profile and "vulnerable" business risk profile. We 
assess the company's financial policy as very aggressive, supported by a 
debt-financed dividend and highly leveraged capital structure. We estimate 
adjusted leverage remains high at about 5.1x at Sept. 30, 2012, compared with 
the low-3x area prior the dividend in May 2011. Springs Window's narrow 
business focus in the cyclical window coverings industry, customer 
concentration, and participation in an intensely competitive industry continue 
to contribute to the company's vulnerable business risk profile.

RELATED CRITERIA AND RESEARCH
     -- Recovery: Criteria Guidelines for Recovery Ratings on Global 
Industrials Issuers' Speculative-Grade Debt, Aug. 10, 2009
     -- Corporate Ratings Criteria 2008, April 15, 2008

RATING LIST
Springs Window Fashions LLC 
 Corporate credit rating          B/Stable/--

Issue rating raised; Recovery rating revised
                                  To               From
Springs Window Fashions LLC 
 Senior secured 
  $300 mil. term loan due 2017    B+               B
    Recovery rating               2                3
  $56.5 mil. revolver due 2016    B+               B
    Recovery rating               2                3

Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.
FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.