NEW YORK — Moody’s Investors Service assigned Revlon Consumer Products Co. its lowest speculative-grade liquidity rating of "SGL-4."
Revlon became one of the first 37 firms with speculative, or "junk," credit ratings to be assigned the new SGL ranking by Moody’s. The measure is "designed to capture a company’s ability to meet its obligations through internal resources and available committed sources of financing," said Moody’s in a statement.
Analyst Russell Gorman, in a separate statement, said the rating was based on Revlon’s "diminished cash, reduced revolver availability, materially compressed sales and negative free cash flow, as well as an absence of material supplemental sources of financing."
Revlon’s senior implied credit rating of "Caa2," which rests three slots above the bottom of Moody’s 21-level scale, was affirmed.
The senior secured note indenture, he said, provides room for up to $62 million in increased secured commitments.
A company spokeswoman noted, "As we said at our investor conference in August, we believe we will have adequate liquidity to fund our business needs."
Hitting a new 52-week low, shares of Revlon lost 58 cents, or 20.1 percent, of their value Wednesday to close at $2.20 on the New York Stock Exchange.
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