U.S.-based apparel manufacturer Renfro's covenant headroom is tight for the coming quarter, reflecting gradual step-downs of covenants and that operating earnings have been hampered by negative currency movements and weak top-line growth. We are affirming our 'B' corporate credit rating on Renfro and revising the outlook to negative to reflect the tight covenant headroom and relatively weak operating and financial performance, the latter of which we expect will only moderately improve over the near to medium term. The negative outlook also reflects the downside risk that Renfro could struggle to meet covenants in the near-term and that financial leverage could remain weak over the near to medium term. This will depend on the extent of near- to medium-term operating performance
