Wilton Brands $400 Million Loan Due 2018 Plunges to Record Low
Wilton Brands LLC’s $400 million loan fell this week to the lowest level since it was issued in August 2012.
The debt, due in August 2018, was quoted today at 93.6 cents on the dollar to yield 9.14 percent at 4 p.m. in London, after dropping to as low as 93.19 cents on Nov. 5, according to prices compiled by Bloomberg. The decline in the debt of the crafts retailer, which is owned by private-equity firm TowerBrook Capital Partners LP, comes over two months after its debt ratings were cut.
Moody’s Investors Service on Aug. 30 lowered the company’s ranking to Caa1, seven levels below investment-grade, citing weaker-than-expected operating performance and an increase in leverage. The ratings company said Wilton’s outlook was “negative.”
Wilton, a specialty food and paper crafts company that has been controlled by TowerBrook since October 2009, had $663 million of revenue in the 12 months ended June 30, according to Moody’s. The ratings company in its report said that it expected that leverage at Wilton, “will likely rise further despite the large mandatory amortization on the first-lien term loan.”
Wilton’s leverage was about 7 times earnings before interest, taxes, depreciation and amortization at the end of June, according to Moody’s.
A telephone call to TowerBrook was referred to Filippo Cardini, the private-equity firm’s chief operating officer and general counsel, who was unavailable for comment. Vallory Farrasso, a spokeswoman for Woodbridge, Illinois-based Wilton, didn’t immediately respond to a telephone call seeking comment.
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