S&P cuts Anvil Knitwear senior debt to CCC

Standard & Poor's said it lowered its long-term corporate credit ratings on textile and apparel manufacturer Anvil Knitwear Inc. as well as the rating on its parent company, Anvil Holdings Inc., to CCC+ from B-. S&P also lowered its senior unsecured debt rating on Anvil Knitwear to CCC from CCC+. The preferred stock rating on Anvil Holdings remains at D.

The outlook on both companies is negative.

"The rating actions reflect Anvil Knitwear's continued poor operating performance and Standard & Poor's expectation of materially weaker credit protection measures for fiscal 2003 and beyond," said S&P credit analyst Susan H. Ding. "The downgrade also reflects the difficulty the company faces in refinancing its revolving credit facility, maturing March 11, 2004."

Anvil Knitwear posted continued revenue declines for the nine months ended Nov. 1. The company also suffered significant margin compression and an operating loss due to higher yarn prices, lower selling prices for basic T-shirts, a shift in product mix toward lower margin goods, and higher operating costs related to the consolidation of its textile operations.

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