S&P cuts David's Bridal to D

S&P said it lowered its issuer credit rating on David's Bridal Inc. to D from SD (selective default).

At the same time, S&P lowered the issue-level rating on the company's term loan facility to D from CCC- but maintained the 3 recovery rating, indicating an expectation for meaningful recovery (50% -70%, rounded estimate: 60%) of principal and prepetition interest.

S&P affirmed the D issue-level rating on the company's unsecured senior notes with a 6 recovery rating, indicating an expectation for negligible recovery (0%- 10%; rounded estimate: 0%).

David's Bridal announced on Nov. 19 it filed a pre-packaged Chapter 11 under the U.S. Bankruptcy code. The company also said it reached a restructuring support agreement with most financial stakeholders (including the term loan lenders, senior unsecured noteholders, and equity owners) on terms of a restructuring that would reduce pre-petition debt outstanding by more than $400 million.

Pre-petition debt of nearly $750 million includes about $480 million of secured term loan debt and $270 million in senior unsecured notes.

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