Fitch rates Avon revolver BB+, view negative

Fitch Ratings said it affirmed Avon Products, Inc.'s long-term issuer default rating at B+.

Fitch also said it assigned a BB+ with recovery rating of RR1 to Avon International Capital plc's €200 million secured revolving credit facility due February 2022.

The outlook was revised to negative from stable.

The outlook revision reflects profitability pressures, elevated leverage, accelerated declines in reps and volume and continued challenges in Brazil, Fitch said.

Avon's revenue will continue to exhibit greater volatility due to the company's focus on emerging markets, foreign-currency fluctuations and continued declines in active reps and orders, the agency said.

In order to stabilize the outlook, Avon needs to demonstrate stabilization in reps, volume and organic revenue growth, refinance its $386 million of 4.6% notes due March 2020 prior to Dec. 15, 2019 and sustain gross leverage in the mid-4x range, Fitch said.

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