S&P cuts Bluestem

S&P said it downgraded the ratings on Bluestem Brands Inc. and its term loan to CCC- from CCC. The 4 recovery rating remains unchanged, indicating the expectation for average (30%-50%; rounded estimate: 45%) recovery in the event of a default.

“Bluestem’s revolver and term loan are due this year and we believe the likelihood that the company will undertake a restructuring in the near term has increased. The company’s $200 million asset-based lending (ABL) facility matures in July and its term loan (roughly $400 million outstanding) comes due on Nov. 7, 2020. In our view, Bluestem does not have a clear refinancing plan and we believe it is increasingly likely that the company will pursue a holistic debt restructuring to address its maturities given its weak operating performance,” said S&P in a press release.

The outlook is negative.

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