S&P could lower Revlon

S&P said it placed its ratings, including its B+ corporate credit rating, on Revlon Consumer Products Corp. on CreditWatch with negative implications.

The CreditWatch placement follows Revlon's announcement that it will acquire all of the outstanding shares of Elizabeth Arden, Inc. for $14 per share in cash. The transaction, valued at about $870 million, also includes repayment of Elizabeth Arden's debt and preferred stock.

Revlon has secured about $2.6 billion of financing to fund the acquisition, refinance debt at Elizabeth Arden, and to refinance Revlon's existing outstanding bank term loans of roughly $1.3 billion. In addition, the company plans to refinance and upsize its revolving credit facility to $400 million from $175 million currently.

"We believe the transaction would weaken Revlon's credit protection measures beyond our current expectations for the company to maintain debt leverage below 5.5x," S&P credit analyst Mariola Borysiak said in a news release.

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