Standard & Poor's Ratings Services has updated the recovery analysis on Pembroke Pines, Fla.-based Claire's Stores Inc. to reflect the effect of the company's $400 million senior secured note offering. The specialty jewelry and accessory retailer will use the proceeds from the first-lien notes to partly pay down its term loan facility. We simulate a default occurring in 2013 due to a steep decline in revenue and EBITDA. The situation would result from weak consumer spending, a decline in store traffic, and lower industry pricing--due to higher competition--during times of heightened economic volatility. Claire's debt structure consists of: A $200 million senior secured revolving credit facility due 2013. A $1.45 billion ($764 million outstanding pro forma for the note issuance)...
Companies mentioned in this report are: Claire's Stores Inc.
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