S&P downgrades Revlon

S&P said it lowered its corporate credit rating on Revlon Inc. to B from B+. The outlook is stable.

In addition, S&P lowered its issue-level rating on the company's $1.8 billion term loan B to B from B+, with a 3 recovery rating indicating an expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default.

Concurrently, S&P lowered its issue-level rating on the company's $500 million notes due in 2021 and $450 million notes due in 2024 to B- from B. The recovery rating on both is 5, reflecting an expectation for modest (10%-30%; rounded estimate: 15%) recovery of principal in the event of a payment default.

“The rating action reflects our belief that Revlon's operating performance will remain below our previous expectations, with pro forma debt leverage increasing to about 8x (excluding restructuring and integration costs from our EBITDA addbacks) by the end of fiscal 2017 from our earlier projection of mid-5x. Moreover, we now expect that the company's FOCF will turn negative during the year and that credit metrics will remain very weak through 2018,” S&P said in a news release.

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