Fitch revises Avon view to stable

Fitch said it affirmed Avon Products, Inc.'s long-term issuer default rating at B+ and revised the outlook to stable from negative.

Avon Products’ senior unsecured notes are rated B+/RR4, and Avon International Operations, Inc.’s senior secured revolver and senior secured notes are rated BB+/RR1.

“The outlook revision to stable reflects Avon's concerted efforts to improve its credit profile through debt reduction following the company's early redemption in June 2018 of $238 million of 6.5% senior notes due 2019, which reduced leverage to 3.8x as of June 30, 2018 from 4.4x in 2017,” Fitch said in a news release.

“The B+ rating reflects Fitch's concern that despite early signs of improvement in certain key markets, which should support annual EBITDA of approximately $0.5 billion, Avon faces continued challenges in Brazil, its largest market representing 22% of total revenue, and lack of improvement in the company's key performance indicators, particularly continued declines in active representatives (reps) and orders.”

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