S&P: Wilton view now negative

Standard & Poor’s said it affirmed its corporate credit rating on Wilton Holdings Inc. at B- and revised the outlook to negative from stable.

S&P also affirmed the issue-level rating on the company’s $400 million senior secured term loan due 2018 at B-. The 3 recovery rating on this term loan is unchanged and indicates an expectation for meaningful (50% to 70%) recovery in the event of payment default.

“The negative outlook reflects Wilton’s continued weak operating performance, which has resulted in credit protection measures below our expectations, including adjusted leverage of about 12x,” said S&P credit analyst Stephanie Harter in a news release.

“As such, we believe Wilton will be challenged to meaningfully reduce adjusted leverage given its growing accrued liabilities, unless the company is able to improve operating performance, which could be weakened if consumer spending decreases and if demand shifts in non-food and paper crafts.”

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