Research Update: Samsonite International S.A. Downgraded To 'BB-' Due To The Impact Of Coronavirus On Travel; Outlook Negative

Luxembourg-based Samsonite International S.A.'s performance will likely be hurt by global travel restrictions, social distancing shuttering retail stores, and weaker global macroeconomic conditions as a result of the coronavirus pandemic. We are removing the ratings from CreditWatch, where they had been placed with negative implications on March 3, 2020, as the coronavirus situation worsened globally. We are lowering our issuer credit rating on Samsonite to 'BB-' from 'BB+' to reflect our view that its revenues and EBITDA will drop by substantially, resulting in debt leverage peaking above 5x despite continued strong cash flow generation and debt prepayment. We are also lowering our ratings on the company's senior secured debt to 'BB+' from 'BBB-' and on the senior unsecured debt to

... performance will likely be hurt by global travel restrictions, social distancing shuttering retail stores, and weaker global macroeconomic conditions as a result of the coronavirus pandemic. - We are removing the ratings from CreditWatch, where they had been placed with negative implications on March 3, 2020, as the coronavirus situation worsened globally. We are lowering our issuer credit rating on Samsonite to '##-' from '##+' to reflect our view that its revenues and EBITDA will drop by substantially, resulting in debt leverage peaking above 5x despite continued strong cash flow generation and debt prepayment. - We are also lowering our ratings on the company's senior secured debt to '##+' from '###-' and on the senior unsecured debt to '##-' from '##+'. The recovery ratings remain '1' and '4', respectively. - The negative outlook reflects the risk that sustained business disruption from the coronavirus and the ensuing recession will...

Research Update