Research Update: Rodan&Fields LLC Downgraded To 'CCC-' On Increased Likelihood Of Default; Outlook Negative

U.S.-based skin care company Rodan&Fields LLC's (R+F) operating performance and liquidity remain pressured, and we view its liquidity as weak amid the current high interest environment. We now believe it is highly likely that the company could default over the next six months by either restructuring its debt or missing principal or interest payments because currently paid-in-kind (PIK) interest accruals will be required to convert to cash pay. Therefore, we lowered our issuer credit rating on the company to 'CCC-' from 'CCC'. At the same time, we lowered our issue-level rating on R+F's super priority second out term loan to 'CCC+' from 'B-' with a '1' recovery rating. We also lowered our issue-level rating on the super priority

...- U.S.-based skin care company Rodan & Fields LLC's (R+F) operating performance and liquidity remain pressured, and we view its liquidity as weak amid the current high interest environment. - We now believe it is highly likely that the company could default over the next six months by either restructuring its debt or missing principal or interest payments because currently paid-in-kind (PIK) interest accruals will be required to convert to cash pay. - Therefore, we lowered our issuer credit rating on the company to '###-' from '###'. - At the same time, we lowered our issue-level rating on R+F's super priority second out term loan to '###+' from 'B-' with a '1' recovery rating. We also lowered our issue-level rating on the super priority third out term loan to '##' from '###' and revised the recovery rating to '5' from '4'. - The negative outlook reflects the possibility of a lower rating given the elevated risk of a default or debt restructuring within the next six months....

Research Update