S&P drops Empire Today, notes to B-

Standard & Poor's said it lowered its corporate credit rating on Empire Today LLC to B- from B.

The outlook is negative.

Additionally, the agency lowered its issue rating on the company's $150 million senior secured notes due 2017 to B- from B. The recovery rating remains 4, indicating an expectation for average (30%-50%) recovery for noteholders in the event of a payment default.

"The rating actions on Empire Today reflect weaker-than-expected operating performance over the past few quarters because of pressured top-line growth, which has produced less customer leads than we had previously projected," S&P credit analyst Kristina Koltunicki said in a news release.

"We estimate credit protection measures will be constrained over the next 12 months because of the highly fixed cost structure of the company absent any significant revenue increases. We have revised our management and governance score to 'weak,' based on our view that management and the board has been less than effective in navigating challenging market conditions. The recent termination of the company's CEO, and the related uncertainty surrounding related party transactions, also point to operational ineffectiveness."

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