S&P rates Hanesbrands notes BB, view to negative

S&P said it affirmed the corporate credit rating on Hanesbrands Inc. at BB and revised the outlook to negative from stable.

The agency also said it assigned a BB rating and 3 recovery rating on the proposed $1.5 billion unsecured notes. The 3 rating indicates 50% to 70% expected default recovery.

The agency also said it affirmed the rating on the company's $1 billion unsecured debt at BB. The recovery rating is unchanged at 3.

S&P also said it affirmed the ratings on the company's first-lien $1 billion revolver expiring April 2020, $725 million term loan due April 2020, $425 million term loan due April 2022 and €500 million term loan due August 2021 at BBB-.

The 1 recovery rating continues to indicate 90% to 100% expected default recovery.

The negative outlook reflects the deterioration of the company’s credit metrics and the possibility that Hanesbrands may not be able to the credit metrics should it incur difficulties integrating acquisitions, S&P said.

The company's pro forma debt-to-EBITDA leverage is expected to be 4.7x, up from 4.2x at the end of its fiscal first quarter, the agency said.

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