S&P cuts American Apparel

Standard & Poor's said it lowered its corporate credit rating to CCC from B- on American Apparel Inc. The outlook is developing.

S&P also lowered its issue-level ratings on the company's $200 million senior secured notes due 2020 to CCC- from B- and revised the recovery rating to 5 from 4. The 5 recovery rating indicates an expectation of modest recovery (10% to 30%) in the event of a payment default.

"We believe the company could lose access to funding under its revolving credit facility as a result of noncompliance with financial covenants if it cannot secure an amendment to the facility," said S&P credit analyst Linda Phelps in a news release.

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