S&P downgrades Dan River
October 24, 2003-- Home Textiles Today,
New York — Reacting to Dan River's pre-announcement of a 30 percent slide in third-quarter sales, Standard & Poor's, one of the big three corporate credit rating agencies, downgraded its rating on the textile producer's long-term debt to 'B-' from 'B+,' and its rating on senior unsecured debt to 'CCC' from 'B-.'
In addition, S&P placed the company's ratings on CreditWatch "with negative implications."
Because of the eroding sales and earnings outlook, S&P said Dan River is now required to hire financial advisors by Oct. 31 and deliver a restructuring plan by Dec. 1.
S&P said it's "concerned about Dan River's ability to improve its operating results given the challenging business environment, expected higher raw material prices, and the tighter liquidity position the company faces with the new minimum excess availability requirement under the bank facility."
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