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4 May, 2020 | 21:28
Latin America, APAC, United States of America

Sector Corporates Autos & Capital Goods Gaming & Leisure Retail & Consumer Products
Tags Americas Latin America APAC

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For an industry that's been ailing for years, the coronavirus pandemic is a body blow many retailers won't survive. J. Crew Group Inc.'s announcement today that it filed for bankruptcy should not come as a surprise. (We lowered the rating to 'CCC-' last September). In our view, this is the first of many that will likely restructure in- or out-of-court in the next one to two years.

Of the approximately 125 issuers we rate in the retail and restaurant sectors, about 30% are now rated 'CCC+' or lower, implying at least a 1-in-2 chance they will eventually default. Which retailers will survive the coronavirus pandemic in some shape or form is the big question.

We believe the economic shutdown and lingering social distancing behaviors will trigger a broad shakeout of retail as the industry will be forced to meaningfully reduce its physical footprint and rapidly evolve to reach the post-pandemic consumer. In particular, if there were any doubts about the eventual demise of many American malls, the impact of the pandemic will likely dispel them. In addition to J. Crew's filing, missed interest payments by both J.C. Penney Co. Inc. and Neiman Marcus Group Ltd. LLC in April is further evidence that iconic brands are also at risk with onerous, legacy capital structures and dated, traditional retail models in need of change.

The high proportion of distressed retailers portends an elevated default rate of almost 20% for speculative-grade issuers. In contrast, we expect 10% across the broader corporate rated universe. Year to date, eight rated retail and restaurant issuers have defaulted (Table 1), as many as in all of 2019. These statistics include distressed exchanges, which we consider tantamount to default.

Table 1

Retail And Restaurant Defaults Year To Date
As of May 4, 2020
Date	Parent	To	From	Reason
May 4	J. Crew Group Inc.	D	CCC	Chapter 11
Apr 22	The Neiman Marcus Group LLC	D	CCC-	Missed interest payments
Apr 17	Mister Car Wash Holdings Inc.	SD	CCC+	Distressed exchange
Apr 16	J.C. Penney Co. Inc.	D	CCC	Missed interest payments
Apr 1	Steak n Shake Inc.	SD	CCC-	Distressed exchange
Feb 18	Pier 1 Imports Inc.	D	CCC-	Chapter 11
Feb 14	NPC International Inc.	SD	CCC-	Missed interest payments
Jan 9	Moran Foods LLC (SAL Acquisition Corp.)	SD	CCC	Missed interest payments
SD--Selective default. Sources: S&P Global Ratings, S&P Global Market Intelligence’s CreditPro®.

Below are the retailers and restaurants we consider the most likely to default in 2020 and beyond (Table 2). We also summarize what we believe are the key risks to each issuer's ability to emerge from the pandemic intact.

Table 2

'CCC' And 'CC' Rating Category Issuers Breakdown
Issuer	Rating	Recent Rating Action	Date	Subsector	Summary
99 Cent Only Stores LLC	CCC+/Developing	99 Cents Only Stores LLC Upgraded To 'CCC+' From 'SD' On Completed Exchange; Outlook Developing	Aug 1, 2019	Discounters	While we view the capital structure as unsustainable, an upgrade or downgrade is possible depending on the company's ability to fully execute its targeted cost-reduction and margin-expansion initiatives. Without significant improvement in operating performance--a challenge in today's environment--the discounter may have difficulty refinancing its 2021 maturities. Pro forma leverage before the coronavirus pandemic was 7x.
Ascena Retail Group Inc.	CCC-/Negative	Ascena Retail Group Inc. Upgraded To 'CCC-' From 'SD' Following Distressed Exchange; Outlook Negative	March 16, 2020	Apparel	There is increasing risk Ascena will restructure over the next six months. In our opinion, the company's capital structure is unsustainable, and we expect material cash flow deficits over the coming year. We also believe Ascena's operating and refinancing prospects (its $1.8 billion term loan matures in August 2022) remain limited because of the specialty retail apparel industry's unabated negative secular demand trends and macroeconomic risk from the ongoing coronavirus pandemic.
At Home Group Inc.	CCC+/Negative	At Home Group Downgraded To 'CCC+' From 'B' On Weak Expected Performance Due To Coronavirus Pandemic, Outlook Negative	March 26, 2020	Specialty	The company's operating performance will substantially decline during the coronavirus pandemic and weaker economic outlook, we believe. This increases the likelihood it will face hurdles refinancing its 2022 term loan maturity at par.
BDF Acquisition Corp.	CCC+/Negative	BDF Acquisition Corp. Downgraded To 'CCC+' From 'B' On Expected Weak Performance, Liquidity Pressure; Outlook Negative	March 27, 2020	Specialty	The discount furniture retailer's operating performance is expected to substantially decline as a result of the coronavirus pandemic and weaker economic outlook, leading to cash burn amid store closures and a sharp increase in leverage in fiscal 2020. Prolonged store closures could result in a liquidity crunch if the company does not cut costs or access additional liquidity sources.
Belk Inc.	CCC/Negative	Belk Inc. Ratings Affirmed On Amended And Extended First-Lien Term Loan; Outlook Is Negative	October 17, 2019	Department store	The rating and outlook reflect the continued restructuring risk because we believe the regional department store may be unable to refinance the remaining stub debt (after it completed a partial amend-and-extend of its term loan in fall 2019) at par. We continue to view Belk's capital structure as unsustainable long-term.
Beverages & More Inc.	CCC+/Negative	Beverages & More Inc. Downgraded To 'CCC+' From 'B-'; Outlook Negative	December 6, 2018	Specialty	The specialty beverage retailer's capital structure as unsustainable in our view given its lackluster operating performance and upcoming debt maturities. Both the revolver and 11.5% senior notes mature in fiscal year 2022; the asset-based lending (ABL) facility and first-in, last out (FILO) advances mature on May 22, 2022; and the senior notes mature on June 15, 2022.
Burger BossCo Intermediate Inc.	CCC/Negative	Burger BossCo Intermediate Inc. Upgraded To 'CCC' From 'SD' Following Amendment Execution; Outlook Negative	September 5, 2019	Restaurants	The quick-service restaurant (QSR) operator and franchiser executed an amendment to its first- and second-lien facilities, which included a conversion from cash to payment-in-kind (PIK) interest on the second-lien that we viewed as distressed and tantamount to default. We subsequently raised the rating to 'CCC'. We continue to view the capital structure as unsustainable given the company's operating performance, weak liquidity, and very high leverage.
CEC Entertainment Inc.	CC/Negative	CEC Entertainment Inc. Downgraded To 'CC' From 'CCC' On Elevated Risk For A Debt Restructuring, Outlook Negative	April 14, 2020	Restaurants	CEC, which operates and franchises family entertainment and dining venue Chuck E. Cheese's, formed a restructuring committee to explore various strategic alternatives, including an out-of-court or in-court restructuring. CEC has limited time and resources to refinance its senior unsecured notes, which mature in February 2022. If these notes are not repaid or refinanced, the maturity of the company's credit facility (revolver and term loan) will accelerate to 91 days before the notes' maturity date.
California Pizza Kitchen Inc.	CCC-/Negative	California Pizza Kitchen Inc. Downgraded To 'CCC-' From 'CCC+' On Elevated Risk Of Covenant Breach; Outlook Negative	November 27, 2019	Restaurants	Even before the coronavirus pandemic, we believed the company would likely breach its financial maintenance covenants absent an equity cure or waiver from lenders. Given the catastrophic impact to casual dining and the company's weak performance going into it, we believe California Pizza Kitchen is unlikely to refinance its capital structure at par when the term loan facilities mature in 2022. It will likely restructure its capital structure in the next six months.
Carrols Restaurant Group Inc.	CCC+/Negative	Carrols Restaurant Group Inc. Downgraded To 'CCC+' On COVID-19 Related Operating Disruptions; Outlook Negative	April 20, 2020	Restaurants	A significant decline in EBITDA in fiscal 2020 due to the coronavirus (combined with additional borrowings from its revolver) will rapidly reduce the QSR operator's headroom under its financial covenants in the next two quarters. Therefore, we believe Carrols will need to negotiate with lenders for covenant relief, which leads us to view its capital structure as potentially unsustainable.
Cooper's Hawk Intermediate Holding LLC	CCC+/Negative	Cooper's Hawk Intermediate Holding LLC Rating Lowered To 'CCC+', Removed From CreditWatch; Outlook Negative	April 16, 2020	Restaurants	We expect significant demand declines and operating difficulties for the casual dining and wine club operator due to the coronavirus pandemic and government-mandated dining room closures. This sharp decline in EBITDA could possibly lead to a covenant breach on its first-lien net leverage covenant in the second quarter absent a waiver.
Fogo De Chao Inc.	CCC+/Negative	Fogo de Chao Inc. Downgraded To 'CCC+' From 'B' On Coronavirus And Covenant Concerns, Outlook Negative	April 3, 2020	Restaurants	The Brazilian steakhouse owner and operator's fiscal year 2020 operating prospects have been substantially weakened by the coronavirus pandemic, which leads us to view its capital structure as unsustainable. Our expectation for a significant decline in EBITDA in fiscal year 2020, combined with the additional borrowing from its revolver, will quickly reduce headroom under its springing first-lien net leverage covenant on its revolver (which is in effect). Maturities in 2023 and 2025 afford it some time to recover if it can avoid covenant issues.
GNC Holdings Inc.	CC/Negative	GNC Holdings Inc. Downgraded To 'CC' On Likely Inability To Repay Debt; Ratings Placed On CreditWatch Negative	March 20, 2020	Specialty	The health and wellness products retailer recently announced it does not expect to have sufficient cash flow from operations to repay its $154.7 million convertible notes due in August 2020 and $441.5 million term loan B-2 due in March 2021, with a springing maturity date of May 2020.
GPS Hospitality Holding Co. LLC	CCC+/Negative	GPS Hospitality Holding Co. LLC Downgraded To 'CCC+' On Thinning Covenant Cushion And Cash Flow; Outlook Negative	March 11, 2020	Restaurants	The QSR operator and franchisee's heavy debt burden going into the pandemic contributes to our view that liquidity is pressured and the capital structure may be unsustainable in the long term. We believe the company will likely need to seek covenant relief as it had less than 10% headroom over the required 7x at the end of 2019.
Guitar Center Holdings Inc.	CCC/Negative	Guitar Center Holdings Inc. Downgraded To 'CCC' On Potential For Debt Restructuring; Outlook Negative	February 12, 2020	Specialty	The company's onerous capital structure that includes a revolver due in July 2020 and senior secured notes due in October 2021, respectively, leave it critically exposed to the impact from the COVID-19 pandemic. Guitar Center's $375 million ABL revolver becoming current in July increases the likelihood the company could pursue a distressed exchange or restructuring of its capital in the near term.
Jill Acquisition LLC	CCC+/Negative	Jill Acquisition LLC Downgraded To 'CCC+' On Expected Performance Volatility; Outlook Negative	Dec 12, 2019	Apparel	Store closures and social distancing are likely to leave the apparel retailer at heightened risk of breaching its first-lien 3x net leverage covenant. In addition, with the maturity on its term loan approaching in May 2022, the company has very limited time to turn around performance and regain lender confidence to complete a refinancing transaction at par.
Jo-Ann Stores Holdings Inc.	CCC/Negative	Jo-Ann Stores Holdings Inc. Downgraded To 'CCC' On Weak Expected Performance Amid COVID-19 Outbreak; Outlook Negative	March 19, 2020	Specialty	In addition to mandated store closures as a result of the coronavirus pandemic, Jo-Ann's business is already strained by tariff-related cost pressures, as well as competitive forces. With limited cash and revolver availability of less than $200 million, we believe Jo-Ann will run into liquidity problems within the next 12 months. Furthermore, we believe the company may face difficulty extending its ABL revolver, which matures in October 2021.
Main Event Entertainment Inc.	CCC+/Negative	Main Event Entertainment Inc. Downgraded To 'CCC+' On Revised Expectations Amid Coronavirus Outbreak; Outlook Negative	March 18, 2020	Specialty	Despite a 30% cushion as of the first quarter of fiscal 2020, we believe the impact from the coronavirus outbreak will sharply reduce profitability, likely resulting in a breach of its 3.5x leverage covenant. Furthermore, we believe the global recession may lead to a liquidity crisis at the out-of-home entertainment company's parent, Ardent Leisure.
Miller's Ale House Inc.	CCC/Negative	Miller's Ale House Inc. Rating Lowered To 'CCC' On Coronavirus And Covenant Pressure; Outlook Negative	April 1, 2020	Restaurants	Significant sales and EBITDA declines attributable to the impact of coronavirus on casual diners will create liquidity pressure and make it difficult for the company to meet its covenant over the next 12 months. In addition, the company has sizable quarterly term loan amortization payments.
Mister Car Wash Holdings Inc.	CCC+/Negative	Mister Car Wash Holdings Inc. Upgraded To 'CCC+' From 'SD' Post Debt Restructuring, Outlook Negative	April 20, 2020	Specialty	We raised our issuer credit rating to 'CCC+' from 'SD' after it executed an amendment to its second-lien term loan to allow it to make PIK interest payments for the March, June, and September quarters of 2020. We expect MCW's weaker operating performance and additional debt to increase leverage in 2020 and onward, which could constrain its ability to service its high debt burden. As such, we continue to view the capital structure as unsustainable absent a significant improvement in performance.
New Academy Holding Co. LLC	CCC+/Negative	New Academy Holding Co. LLC Upgraded To 'CCC+' From 'SD' Following Distressed Exchange, Outlook Negative	June 20, 2019	Specialty	The rating on the sporting goods retailer reflects our view that its capital structure is potentially unsustainable due to a significant debt burden and weak operating performance. It will be meaningfully exacerbated by the pandemic. If the company survives, its business prospects will continue to face pressure from established e-commerce and big-box retailers.
Party City Holdings Inc.	CCC+/Negative	Party City Holdings Inc. Downgraded To 'CCC+' On Weak Fourth-Quarter Results And Coronavirus Concerns, Outlook Negative	March 19, 2020	Specialty	Party City's operating prospects this year are substantially worsened by the coronavirus pandemic, following a weak fourth quarter. This highlights ongoing operational challenges. Therefore, we believe it is increasingly likely Party City will face difficulty refinancing its debt at par. Its first material upcoming maturity is its term loan ($725 million outstanding) due in August 2022.
PHD Group Holdings LLC	CCC/Negative	PHD Group Holdings LLC Downgraded To 'CCC' On Strained Capital Structure Amid Coronavirus Disruption, Outlook Negative	April 13, 2020	Restaurants	A restructuring is likely given its very highly leveraged capital structure, which we consider unsustainable. The fast casual dining operator's capital structure includes a second-lien term loan with a high interest rate of LIBOR+9.5% and PIK preferred equity units accruing at 11%. In addition, we believe Portillo's may need to negotiate with its lenders for relief from its springing 6.5x net leverage covenant, which is currently applicable.
Petco Holdings Inc.	CCC+/Negative	Petco Holdings Inc. Downgraded To 'CCC+', Outlook Negative On Weaker-Than-Expected Performance	April 12, 2018	Specialty	Petco's capital structure remains unsustainable as we expect debt to EBITDA to stay in the high-6x area with FOCF deficits over the next 12 months. In addition, discounted debt trading prices heighten the risk of a distressed exchange or restructuring.
Quidditch Acquisition Inc.	CCC+/Negative	Quidditch Acquisition,Inc. Downgraded To 'CCC+' On COVID-19 Related Operating Disruption; Outlook Negative	April 3, 2020	Restaurants	Qdoba's liquidity is constrained and the company could be at risk of a cash shortfall if the pandemic response is prolonged, in our view. In addition, we believe the fast casual restaurant owner and operator could breach a covenant in the next 12 months. With its revolver fully drawn, the springing covenant is applicable and requires the company to maintain a net first-lien leverage ratio no greater than 6.55x.
Red Lobster Intermediate Holdings LLC	CCC+/Watch Neg	Red Lobster Intermediate Holdings LLC Downgraded To 'CCC+'; Ratings Placed On CreditWatch Negative On COVID-19 Hurdles	March 20, 2020	Restaurants	The company's capital structure is unsustainable based on rapidly weakening operating performance in the company's largely dine-in operations that makes it vulnerable to meet its financial commitments. Its ABL facility matures in May 2020 and more than $350 million in term loan borrowings come due in July 2021. We also believe an unsuccessful refinancing increases the likelihood the company could address the maturity with a debt exchange we would view as distressed.
Rite Aid Corp.	CCC+/Stable	Rite Aid Corp. Issuer Credit Rating Raised To 'CCC+' From 'SD' Following Debt Repurchase, Outlook Stable	Oct 22, 2019	Drug Stores	Our rating on Rite Aid reflects our belief its capital structure is unsustainable in the long term, despite our view that the coronavirus pandemic does not pose meaningful risk to pharmacies. The company faces material risks to its business turnaround given the intense rivalry in the drug store sector. Still, it had about $2 billion in liquidity mid-April and no near-term maturities, which support the stable outlook.
Steak n Shake Inc.	CCC-/Negative	Steak n Shake Inc. Upgraded To 'CCC-' From 'SD' Following Distressed Exchange; Outlook Negative	April 6, 2020	Restaurants	The rating reflects our belief there is heightened risk of a conventional default given ongoing risks to the company's business and the impending maturity of its term loan due March 19, 2021. This risk has been exacerbated by the massive near-term disruption in the restaurant industry due to the coronavirus pandemic. This year, the company retired a portion of its term loan at a discount to par, which we viewed as tantamount to default. The rating on the term loan remains 'D' because we believe the company could execute additional below-par debt repurchases.
Tailored Brands Inc.	CCC+/Negative	Tailored Brands Inc. Cut To 'CCC+' On Operational Headwinds, Potentially Unsustainable Capital Structure; Outlook Neg	March 20, 2020	Apparel	The anticipated performance pressures at Tailored, combined with the adverse effects of the coronavirus pandemic, will increase refinancing risk as the company's debt comes due, we believe. If Tailored cannot refinance its unsecured senior notes (with about $174 million outstanding) due in July 2022 by April 2022, its sizable term loan B (with about $880 million outstanding) due in April 2025 will mature early in April 2022. Also, the company's $550 million ABL revolver (with about $360 million outstanding) is due in October 2022. Considering current term loan pricing in the $60s, we believe Tailored has an economic incentive to repurchase its debt below par, which we may consider tantamount to a default.
The Fresh Market	CCC/Negative	The Fresh Market Inc. Upgraded To 'CCC' From 'CCC-', Outlook Negative; New Debt Rated	March 23, 2018	Supermarkets	Despite our expectation that grocers will benefit from consumers' elevated consumption of food at home, we view The Fresh Market's credit protection measures as weak and an elevated risk of distressed exchange or restructuring. Fresh Market's capital structure remains unsustainable as we expect it to sustain elevated leverage and weak projected FOCF generation over the next 12 months along with highly distressed debt pricing.
The Talbots Inc.	CCC+/Negative	The Talbots Inc. Downgraded To 'CCC+' On Liquidity Concerns Amid Coronavirus Outbreak; Outlook Negative	March 30, 2020	Apparel	We expect Talbots' liquidity to deteriorate in 2020 given FOCF deficit projections, only modest balance sheet cash, and low availability on its $185 million revolver. We believe the springing fixed-charge covenant under its ABL revolving credit facility could spring and breach if excess availability falls below 10%. Given our expectation for weak revenue and profit through fiscal 2021, Talbot's could be challenged to refinance its 2022 maturities.
Wok Holdings Inc.	CCC+/Negative	Wok Holdings Inc. Downgraded To 'CCC+' From 'B' On Operational Hurdles From Pandemic; Outlook Negative	March 19, 2020	Restaurants	The rating reflects our view that rapidly weakening operating performance in the restaurant chain's largely dine-in operations makes it dependent on favorable business and financial conditions to meet its commitments. We expect tightening liquidity due to FOCF deficits and marginal covenant headroom in 2020.
Source: S&P Global Ratings.

As investors' demand for high-yield debt remains shaken, front of mind are cash burn rates that would necessitate tapping debt markets, covenant compliance risks, and refinancing needs. An extended shutdown or slower recovery than we expect could push some 'B-' rated issuers into the 'CCC' category (Table 3). They join the 'CCC' list above if they cannot successfully navigate the shutdown and subsequent weak macroeconomic backdrop.

Table 3

Issuers Rated 'B-' That Could Be Downgraded
Issuers Without A Stable Outlook	Rating	Recent Rating Action	Date	Subsector	Summary
Eyemart Express Holdings LLC	B-/Negative	Eyemart Express Holdings LLC Rating Lowered To 'B-' On Store Closures; Outlook Negative	April 9, 2020	Specialty	Although Eyemart's operations are relatively insulated from a recession because of its value proposition and the medical necessity of its products, we still expect some deferral of activity and near-term cash burn will lead to elevated leverage. We could lower our rating on Eyemart if we believe it will be difficult to extend the 2022 maturity on its revolver or if it risks breaching its financial covenants.
GameStop Corp.	B-/Developing	GameStop Corp. Downgraded To 'B-' From 'B+' On COVID-19 Hurdles And Refinancing Risk; Outlook Developing	March 31, 2020	Specialty	The pandemic has exacerbated cyclical problems from the delayed launch of important game consoles. The video game retailer has sufficient cash and availability under its asset-based lending (ABL) facility to redeem the $419 million of unsecured notes maturing in March 2021. But the current environment increases risk to operating performance and cash flow, which could hamper GameStop's ability to redeem the debt if the company cannot refinance it. We could lower the rating if we believe GameStop cannot refinance its notes in a timely manner.
Golden Nugget Inc.	B-/Negative	Golden Nugget Inc. Downgraded To 'B-' On Weakened Performance From Coronavirus; Outlook Negative	April 9, 2020	Restaurant	The restaurant and gaming/casino operator's recent $300 million debt issuance bolsters liquidity through a prolonged period of store closures. But it comes at a very high cost, increasing Golden Nugget's already high interest burden and creating an incremental hurdle in its eventual recovery. We could lower the rating if we no longer expect a slow rebound to materialize, leading us to view the capital structure as unsustainable.
K-Mac Holdings Corp.	B-/Negative	K-Mac Holdings Corp. Outlook Revised To Negative On Operating Disruption Amid Coronavirus Outbreak; Ratings Affirmed	April 6, 2020	Restaurant	We expect negative same-store sales in the low-double-digit percent area in fiscal 2020, which would lead to deteriorating margins and leverage increasing to above 8x (compared to about 6.5x in 2019). Neverthless, the quick-service restaurant (QSR) franchisee's drive-through operations should help limit cash burn, while its cash position of over $40 million should be sufficient to absorb shortfalls over at least the next 12 months. We could lower the rating if cash burn is more severe than we anticipate, reflecting an unsustainable capital structure.
Lands' End Inc.	B-/Watch Neg	Lands' End Inc. Downgraded To 'B-' On COVID-19 Impact, Refinancing Risk; Ratings Remain On CreditWatch Negative	April 27, 2020	Apparel	Lands' End's operating performance will be under pressure as a result of the coronavirus pandemic, with weak liquidity given its $385 million term loan due in April 2021. Its position as a largely e-commerce apparel retailer should reduce the magnitude of COVID-19 impact compared to brick-and-mortar peers, but we still anticipate leverage will jump in fiscal 2021. We could lower the rating if the company appears it cannot refinance its term loan.
Mavis Tire Express Services Corp.	B-/Negative	Mavis Tire Express Services Corp. Downgraded To 'B-' On Business Disruption From The Coronavirus, Outlook Negative	April 8, 2020	Specialty	Operating performance will be pressured in 2020 due to reduced service center operations related to the coronavirus pandemic. We also expect the company's accelerated cash burn and high fixed costs to weaken its credit measures from already-high levels due to a history of acquisitions. We could lower our rating on Mavis if we believe the company's capital structure has become potentially unsustainable, performance does not rebound in line with our expectations, and cash flow remains thin.
Tacala LLC	B-/Negative	Tacala LLC Outlook Revised To Negative On Operating Disruption Amid Coronavirus Outbreak; Ratings Affirmed	April 6, 2020	Restaurant	We expect negative same-store sales in the low-double-digit percent area in fiscal 2020 will lead to deteriorating margins and leverage increasing to above 9x (compared to about 7x in 2019). Neverthless, continuing drive-through operations should help limit cash burn, while its cash position of about $50 million should be sufficient to absorb shortfalls over at least the next 12 months. We could lower the rating if cash burn is more severe than we anticipate, reflecting an unsustainable capital structure.
The Container Store Group Inc.	B-/Watch Neg	The Container Store Group Inc. Downgraded To 'B-', Ratings On Watch Negative On Weak Expected Demand Due To Coronavirus	March 26, 2020	Specialty	Based on our expectation for meaningful near-term cash burn, we think the storage retailer's liquidity could become constrained and, absent a waiver or amendment, it may face difficulty in maintaining adequate headroom over its financial covenants. In addition, if performance does not recover signficantly after the pandemic subsides, it could be challenged to refinance its 2022 and 2023 maturities. We could lower our ratings one notch or more as we evaluate the company's liquidity profile, covenant cushion, and the likelihood it will receive a covenant waiver or amendment.
Source: S&P Global Ratings.

This report does not constitute a rating action.

Primary Credit Analyst:

Sarah E Wyeth, New York (1) 212-438-5658;
sarah.wyeth@spglobal.com

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