S&P revises Avon view to positive

S&P said it affirmed its ratings, including the B corporate credit rating, on Avon Products Inc. and revised the outlook to positive from stable.

The agency also affirmed its BB- issue-level ratings and 1 recovery rating on the company's $400 million revolving credit facility and $500 million senior secured notes.

Concurrently, S&P affirmed its B issue-level rating and 4 (at the high end of the 30%-50% range) recovery rating on Avon's four tranches of senior unsecured notes.

S&P said the outlook revision reflects its expectation that Avon's modest performance gains will result in further strengthening of Avon's credit measures over the next year.

“Although foreign exchange headwinds continued to hurt revenues in 2016, Avon demonstrated constant currency growth in eight of its 10 top markets,” the agency said in a news release.

“The company also meaningfully improved its margins over the past year following the sale of its unprofitable North American business to Cerberus and as a result of its cost savings initiatives.”

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