S&P downgrades Flavors, facilities

S&P said it lowered the corporate credit rating on Flavors Holdings Inc. to CCC+ from B-.

The outlook is stable.

At the same time, the agency downgraded the issue-level ratings on the company's $50 million senior secured revolving credit facility due in 2019 and $350 million senior secured first-lien term loan due in 2020 to CCC+ from B-. The recovery ratings remain 3, indicating expectations for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default.

S&P also lowered the issue-level rating on the company's $50 million senior secured second-lien term loan due in 2021 to CCC from CCC+. The recovery rating remains 5, indicating our expectations for modest (10%-30%; rounded estimate: 25%) recovery in the event of a payment default.

Adjusted debt for the 12 months ended March 31, was about $390 million.

"The downgrade reflects the company's constrained liquidity position from tight covenant cushion and high revolver borrowings that are forecast to continue through 2017," S&P credit analyst Amanda O'Neill said in a news release.

It also reflects the ongoing plan to invest in its new product, which constrains its ability to repay debt and improve liquidity, the agency added.

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