Research Update: Rodan&Fields LLC Downgraded To 'CCC-' As Debt Restructuring Grows More Likely; Outlook Negative

San Francisco-based skincare company Rodan&Fields LLC (R+F) disclosed a proposal by an ad hoc group of lenders to address its capital structure through a debt restructuring. In addition, its liquidity is constrained as it can only borrow $4 million more under its revolver before triggering its first lien leverage covenant, which S&P Global Ratings forecasts it would not be in compliance with. We lowered our issuer credit rating to 'CCC-' from 'CCC' because we believe the company will likely undertake a voluntary debt restructuring to strengthen its balance sheet because it needs to address its near-term revolver maturity and its capital structure. Concurrently, we lowered our issue-level ratings on the company's first-lien credit facility, including its first-lien revolving

...- San Francisco-based skincare company Rodan & Fields LLC (R+F) disclosed a proposal by an ad hoc group of lenders to address its capital structure through a debt restructuring. In addition, its liquidity is constrained as it can only borrow $4 million more under its revolver before triggering its first lien leverage covenant, which S&P Global Ratings forecasts it would not be in compliance with. - We lowered our issuer credit rating to '###-' from '###' because we believe the company will likely undertake a voluntary debt restructuring to strengthen its balance sheet because it needs to address its near-term revolver maturity and its capital structure. - Concurrently, we lowered our issue-level ratings on the company's first-lien credit facility, including its first-lien revolving facility due 2023 and the term loan due 2025 to '###- 'from '###+'. We revised our recovery rating to '3', reflecting our recovery expectation on the credit facility of meaningful (50%- 70%; rounded estimate:...

Research Update