S&P rates Unifi notes CCC+

Standard & Poor's said it assigned a CCC+ debt rating with a recovery rating of 4 to Unifi Inc.'s proposed $225 million senior secured notes due 2014 and affirmed the company's CCC+ corporate credit and senior unsecured debt ratings. The outlook is negative.

Note proceeds will be used to refinance the company's existing 6½% notes due 2008.

S&P said the ratings reflect the company's narrow business focus, the highly competitive conditions in its market and the fundamental changes in the way the industry operates, which have hurt Unifi's operating performance. The ratings also reflect the agency's expectation that financial results will be pressured due to continued escalating raw material costs.

In addition, the difficult operating environment and adverse market conditions, characterized by excess industry capacity and a shrinking domestic customer base, have led to negative unit volume and pricing trends, S&P added.

At March 26, year-over-year debt to EBITDA was 7.6x.

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