S&P nicks Naked Juice

S&P said it lowered its ratings for Naked Juice LLC and its first-lien credit facility to B- from B and second-lien term loan to CCC from CCC+. The first-lien recovery rating of 3 (50%-70%; rounded estimate: 65%) and second-lien recovery rating of 6 (0%-10%; rounded estimate: 0%) in default are unchanged.

“Naked Juice has performed well below our expectations, with the full impact of several headwinds becoming evident in the third quarter of 2022. Management indicates reported EBITDA excluding stand-alone costs fell 32.5% year to date and almost 50% in the third quarter. We expect S&P Global Ratings-adjusted leverage will approach 10x as of fiscal year-end 2022, compared to about 7.25x pro forma at close for the leveraged buyout,” S&P said in a press release.

The agency said it estimates $120 million FOCF use in 2023 for the company, which will require revolver borrowings.

The outlook is stable.

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