PE Debt Watch (Downgrades & Upgrades)
As usual, we have a week’s worth of ratings actions (mostly downgrades) on the debt of LBO-backed companies from ratings agencies S&P and Moody’s. This week Warburg Pincus completed a distressed debt exchange, which Moody’s answered with a downgrade. Meanwhile, S&P is encouraged by the not-declining performance of Claire’s Stores, the teen jewelry mall retailer owned by Apollo Management. I guess it’s really true that “flat is the new up.” Company: Claire’s Stores Sponsor: Apollo Management Action: Standard & Poor's Ratings Services revised the outlook on Pembroke Pines, Fla.-based Claire's Stores Inc. to stable from negative. At the same time, we affirmed all other ratings on the company, including the 'B-' corporate credit rating. Highlight: While we believe operations will likely remain challenged given difficult macroeconomic conditions and the company's dependence on mall traffic, we do not expect them to substantially decline over the near term. Claire's credit protection metrics have stabilized along with operations and have evidenced little material change over the past year.
