Research Update: VC GB Holdings I Corp. Downgraded To 'B-' On Higher-Than-Expected Leverage; Outlook Stable

U.S.-based VC GB Holdings I Corp. (operating as Visual Comfort&Co.) reported higher-than-expected leverage and weakened operating cash flow for the 12 months ended Dec. 31, 2021. We believe a recovery will be difficult amid high inflation and declining consumer discretionary spending. We lowered our issuer credit rating on VC GB Holdings to 'B-' from 'B'. Concurrently, we lowered our rating on the company's first-lien term loan to 'B-' from 'B'. The recovery rating remains '3', indicating our expectation of meaningful recovery (50%-70%; rounded estimate: 55%) in the event of a payment default. We also lowered our rating on the second-lien term loan to 'CCC' from 'CCC+'. The recovery rating remains '6', indicating our expectation of negligible recovery (0%-10%;

...- U.S.-based VC GB Holdings I Corp. (operating as Visual Comfort & Co.) reported higher-than-expected leverage and weakened operating cash flow for the 12 months ended Dec. 31, 2021. We believe a recovery will be difficult amid high inflation and declining consumer discretionary spending. - We lowered our issuer credit rating on VC GB Holdings to 'B-' from 'B'. - Concurrently, we lowered our rating on the company's first-lien term loan to 'B-' from 'B'. The recovery rating remains '3', indicating our expectation of meaningful recovery (50%-70%; rounded estimate: 55%) in the event of a payment default. - We also lowered our rating on the second-lien term loan to '###' from '###+'. The recovery rating remains '6', indicating our expectation of negligible recovery (0%-10%; rounded estimate: 0%). - The stable outlook reflects our expectation that Visual Comfort will maintain adequate liquidity; profitability and cash flow should improve due to price increases and strong demand trends, despite...

Research Update