Bulletin: VF Corp.'s Sale Of Supreme Will Address Upcoming Maturities And Lower Its Debt Burden

This report does not constitute a rating action. NEW YORK (S&P Global Ratings) July 17, 2024--S&P Global Ratings today said VF Corp.'s (BBB-/Negative/A-3) announcement that it will sell Supreme to global eyewear manufacturer EssilorLuxottica (A/Stable/A-1) for $1.5 billion will improve leverage and address upcoming debt maturities. Our ratings on VF Corp. are unchanged. The company expects the deal to close by the end of the year. We estimate leverage for the pro forma fiscal year-ended March 2024 will improve to near 4.5x from 5.1x (assuming $100 million of deal costs and the company applies all net proceeds to debt reduction), which is still above our 4x downgrade trigger. The transaction reduces leverage , alleviates concerns over the company?s ability to

...July 17, 2024 This report does not constitute a rating action. NEW YORK (S&P Global Ratings) July 17, 2024--S&P Global Ratings today said VF Corp.'s (###- /Negative/A-3) announcement that it will sell Supreme to global eyewear manufacturer EssilorLuxottica (A/Stable/A-1) for $1.5 billion will improve leverage and address upcoming debt maturities. Our ratings on VF Corp. are unchanged. The company expects the deal to close by the end of the year. We estimate leverage for the pro forma fiscal year-ended March 2024 will improve to near 4.5x from 5.1x (assuming $100 million of deal costs and the company applies all net proceeds to debt reduction), which is still above our 4x downgrade trigger. The transaction reduces leverage , alleviates concerns over the company's ability to repay its $1 billion term loan due in December 2024, and address a portion of its $750 million 2.4% notes due in April 2025. However, operating performance remains weak and brand health for most of its portfolio is challenged....

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