S&P shifts Fossil view to stable

S&P said it revised the outlook on Fossil Group Inc. to stable from negative and affirmed the B issuer rating. The agency also affirmed the B+ issue-level and 2 recovery ratings on its $200 million senior secured first-lien term loan maturing in 2024. The 2 recovery rating reflects an expectation for substantial (70%-90%; rounded estimate: 70%) recovery in default.

“The outlook revision reflects our expectation that Fossil will improve its credit metrics in 2021 on increased demand and benefits from cost-cutting initiatives. Fossil's S&P Global Ratings-adjusted debt to EBITDA declined to 2.1x for the 12 months ended June 30, down from 8.7x at the end of fiscal 2020. EBITDA interest coverage improved to 3.1x from over 0.8x in the same period,” the agency said in a press release.

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