Research Update: SSH Holdings Inc. d/b/a Spencer Spirit Upgraded On Deleveraging Amid Strong Halloween Performance; Outlook Stable

U.S.-based novelty gift and Halloween retailer SSH Holdings Inc. (doing business as Spencer Spirit) recently reported better-than-anticipated results for the Halloween season, resulting in strong EBITDA growth and lower leverage. We are raising our issuer credit rating on the company to 'B+' from 'B'. The outlook is stable. At the same time, we are raising our issue-level rating on its senior secured term loan to 'B+' from 'B'. We are also revising our recovery rating on the debt to '3' from '4', indicating our expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default or bankruptcy. The stable outlook reflects our expectation for business performance to moderate somewhat in 2021 from its 2020 record level,

...- U.S.-based novelty gift and Halloween retailer SSH Holdings Inc. (doing business as Spencer Spirit) recently reported better-than-anticipated results for the Halloween season, resulting in strong EBITDA growth and lower leverage. - We are raising our issuer credit rating on the company to 'B+' from 'B'. The outlook is stable. - At the same time, we are raising our issue-level rating on its senior secured term loan to 'B+' from 'B'. We are also revising our recovery rating on the debt to '3' from '4', indicating our expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default or bankruptcy. - The stable outlook reflects our expectation for business performance to moderate somewhat in 2021 from its 2020 record level, resulting in leverage sustained in the mid- to high-2x area and funds from operations (FFO) to debt in the mid-20% area....

Research Update