S&P downgrades Provo Craft

Standard & Poor's said it lowered the corporate credit rating on Provo Craft & Novelty Inc. to CCC+ from B, along with its remaining $170 million senior secured credit facility to B- from B+. The 2 recovery rating on the facility remains unchanged.

The agency said it also revised the CreditWatch listing for the corporate credit and issue-level ratings to developing from negative.

The ratings were initially placed on CreditWatch with negative implications in December, reflecting a belief that the company may not be able to comply with its financial covenants over the near term due to potentially weaker-than-expected operating performance and weak covenant cushion, S&P said.

The downgrade reflects a belief that the company might breach the total leverage or senior leverage ratio covenants in the near term, the agency said.

A decline in the company's operating performance and profitability also is expected in the near term, S&P said.

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