--Harry & David slides to S&P lowest junk on missed interest payment

Internet Business News
03-08-2011
--Harry & David slides to S&P lowest junk on missed interest payment

INTERNET BUSINESS NEWS-(C)1995-2011 M2 COMMUNICATIONS

8 March 2011 - S&P on Monday slashed to D, denoting default, from CC its unsolicited corporate credit rating on Harry & David Operations Corp, a US direct marketing and e-commerce company selling gourmet foods.
The downgrade to the lowest "junk" status follows a missed interest payment on its USD70m (EUR50m) senior floating-rate notes and USD175m senior fixed-rate notes. The interest payment was due on 1 March.

Consequently, the ratings on the above notes were reduced to D, but their recovery ratings of 5 remained intact denoting modest, 10% to 30%, recovery prospects.

The company has hired advisors to examine recapitalisation options after results for the second quarter ended 25 December 2010 missed expectations.

The company is considering a balance-sheet restructuring and may seek bankruptcy protection from creditors, S&P said explaining the negative rating action.

The service also notes that the unsolicited ratings are based on publicly-available information that has not been explicitly confirmed by the company and could therefore lack accuracy and completeness.

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(Copyright M2 Communications, 2011)