S&P lifts Tempur Sealy notes, view positive

Standard & Poor's said it affirmed its BB- corporate credit rating on Tempur Sealy International Inc. and revised the outlook to positive from stable.

The agency also affirmed its BB+ issue-level ratings on the company's senior secured credit facilities, including its $350 million revolver due 2018, $550 million term loan A due 2018 and $870 term loan B due 2020. The recovery ratings remain 1, indicating expectations for very high (90% to 100%) recovery in the event of a payment default.

S&P raised the senior unsecured debt issue-level ratings on Tempur Sealy’s $375 million notes due 2020 to BB- from B+ and revising the recovery rating to 3, indicating expectations for meaningful (50% to 70%) recovery in the event of a payment default at the higher end of the range, from 5.

The raised ratings reflect the company's overall debt reduction, and the agency’s reassessment of the company's enterprise value.

"The outlook revision to positive from stable reflects Tempur Sealy's deleveraging since its acquisition of Sealy in 2013 and our expectation that credit protection measures will continue to improve," S&P credit analyst Bea Chiem said in a news release.

The agency estimates the company's adjusted debt was approximately $1.7 billion as of June 30.

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