U.S.-based The Scotts Miracle-Gro Co. (Scotts) missed our forecast and consensus earnings, materially lowered fiscal year 2023 guidance, and amended its credit agreement including obtaining financial covenant relief. We lowered our issuer credit rating to 'B+' from 'BB-' because multiple downward performance revisions have left the highly seasonal, weather-dependent company with historically weak credit ratios, tight covenants, and the need to materially improve profits in a fragile economy. At the same time, we lowered our rating on Scott's senior unsecured notes to 'B-' from 'B'. The recovery rating on the notes remains '6', reflecting our expectation for negligible (0-10%; rounded estimate 0%) recovery in the event of a payment default. The negative outlook reflects Scotts' tight covenant cushion and need
