S&P cuts 361 Degrees International

S&P said it downgraded its ratings for 361 Degrees International Ltd. and its senior unsecured notes to B- from B+. The notes mature next June and the agency said it sees a significant refinancing risk.

“361 Degrees’ competitiveness is deteriorating as Covid-19 has accelerated industry consolidation. We believe the company will continue to lose market share to industry leaders owing to its low product differentiation, smaller scale and weaker cash generation,” S&P said in a press release.

S&P said the company cut marketing spending and staff costs to help it control costs. “We have therefore revised our EBITDA margin forecast to 10%-12% for 2020 and 2021, compared with our earlier estimate of 9%-11%,” the agency said.

The outlook is negative.

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