S&P cuts NYDJ CCR, loans to B-

Standard & Poor's said it lowered its corporate credit rating on NYDJ Apparel LLC to B- from B.

The outlook is negative.

Concurrently, the agency lowered its issue-level ratings on the company's $12.5 million revolver due 2019 and $150 million first-lien term loan due 2020 to B- from B+. The recovery ratings were revised to 3, which indicates an expectation for meaningful (50% to 70%, at the low end of the range) recovery in the event of a payment default, from '2'.

"The downgrade reflects NYDJ's weaker-than-expected operating performance in 2014, which has resulted in a deterioration of credit metrics and thin covenant cushion levels of less than 10%, and our expectation the company will be unable to meaningfully improve its operating performance and credit metrics over the next two years," S&P credit analyst Ryan Ghose said in a news release. "Moreover, the company could breach covenants if it cannot reverse current performance as it faces step-downs later this year."

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