S&P rates Vogue loan B

Standard & Poor's said it assigned a B corporate credit rating to Vogue International LLC, along with a B rating on its new $445 million senior secured credit facility composed of a $30 million revolver and $415 million first-lien term loan.

The recovery rating is 3, which indicates 50% to 70% expected default recovery.

The outlook is stable.

The ratings reflect the company's weaker credit metrics as a result of the debt capitalization in conjunction with Carlyle purchasing 49% of the company, said Jacqueline Hui, an S&P analyst.

Hui said in a press release that the company's leverage is estimated to rise to more than 4x from no debt.

The company's financial policy also is expected to remain aggressive given Carlyle's partial ownership, Hui said.

The ratings also consider a belief that Vogue's product/brand focus in the highly competitive hair-care products industry is relatively narrow, S&P said, and its size is relatively small compared to much larger and more diversified personal care players, including Procter & Gamble, Unilever and L'Oreal.

The company benefits from sales growth prospects and growing brand awareness, but remains small and narrowly concentrated in the premium mass segment of the hair care industry, the agency said.

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