S&P rates Renfro loan B, lowers view to stable

Standard & Poor's said it affirmed the B corporate credit rating on Renfro Corp. and revised the outlook to stable from positive.

S&P also said it assigned a B rating to Renfro's $220 million term loan B due 2019. The recovery rating is 4, indicating 30% to 50% expected default recovery.

The outlook revision reflects the apparel manufacturer's higher debt level and weaker credit metrics following its recapitalization, S&P said, and a belief that credit metrics will not improve enough over the next year to support a higher rating.

The proceeds will mainly refinance existing debt and also fund a dividend to the company's financial sponsor, the agency said.

The company's financial profile has weakened to aggressive from significant due to the deterioration of credit metrics following the recapitalization, S&P said, and a belief that ratios will remain close to current levels.

The financial risk assessment also takes into account the company's ownership and board control by a private equity sponsor and its willingness to distribute debt-financed dividends, the agency said.

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