We estimate U.S.-based kitchenware manufacturer and distributor WKI Holding Co. Inc.'s total net leverage covenant cushion could remain below 10% for the quarter ended September 2014, reflecting earnings that were more volatile than we expected earlier in 2014. We are affirming the corporate credit rating at 'B', and affirming the issue-level rating on the senior secured notes at 'B'. The recovery rating is unchanged at '3'. We are revising the outlook to negative, reflecting our expectation that covenant cushion could remain below 15% during its peak seasonal working capital quarters given the ongoing step-downs in the company's covenant schedule. On Aug. 26, 2014, Standard&Poor's Ratings Services affirmed its corporate credit rating on Rosemont, Ill.-based WKI Holding Co. Inc.
