Weekly Downgrade Wrap-up
As usual, I have a week and a day’s worth of Moody’s and S&P downgrades on PE-backed companies. This week, there were nine new ones, including two backed by Warburg Pincus and two from Bain Capital. (Apologies for the delay as I was out Friday and Monday) Company: Rafaella Apparel Group Sponsor: Cerberus Capital Management Downgrade: S&P announced a corporate credit rating downgraded from 'CCC' from 'B-'.The outlook is negative. Highlights: “We estimate that leverage may increase to over the 11.5x area (assuming debt levels do not increase significantly from current levels) if revenues decline by about 13% for fiscal 2009 from fiscal 2008 levels and EBITDA margins remain in the low single digits, which may reduce Rafaella's net income covenant cushion.”
