Research Update: Elevate Textiles Inc. Ratings Affirmed On Reduced Leverage Despite Elevated Refinancing Risk, Outlook Positive

Although North Carolina-based Elevate Textiles Inc. has performed in-line with our expectations and reduced its S&P Global Ratings-adjusted leverage to 7.7x, we still believe it faces refinancing risk because its high debt load will becomes current in spring 2023. Furthermore, the elevated level of current market volatility and the increasing interest rate environment raises the uncertainty around its ability to refinance its debt on favorable terms. We affirmed all of our ratings on the company, including our 'CCC+' issuer credit rating. The positive outlook reflects that we could raise our ratings on Elevate over the next 12 months when we receive more clarity around its ability to address its key maturities, including its asset-based lending (ABL) facility and first-lien term

...- Although North Carolina-based Elevate Textiles Inc. has performed in-line with our expectations and reduced its S&P Global Ratings-adjusted leverage to 7.7x, we still believe it faces refinancing risk because its high debt load will becomes current in spring 2023. Furthermore, the elevated level of current market volatility and the increasing interest rate environment raises the uncertainty around its ability to refinance its debt on favorable terms. - We affirmed all of our ratings on the company, including our '###+' issuer credit rating. - The positive outlook reflects that we could raise our ratings on Elevate over the next 12 months when we receive more clarity around its ability to address its key maturities, including its asset-based lending (ABL) facility and first-lien term loan, before they become current in early 2023. We believe this would likely occur if it continues to improve its operating performance and reduce its leverage while generating positive free cash flow and...

Research Update