Anvil Knitwear could have problems refinancing its credit facilities maturing on March 11. Continued deterioration in operating performance could hurt Anvil's ability to renew or refinance, notes Standard & Poor's , which has lowered the corporate credit rating to CCC+ from B-. Anvil had about $135.8 million of debt outstanding as of Nov. 1. Calls to Pasquale Branchizio , Anvil's v.p. of finance, were not returned.
Anvil posted continued revenue declines for the nine months prior to November. There was significant margin compression and operating loss due to higher yarn prices, lower selling prices for basic T-shirts, a shift in product mix toward lower margin goods and higher operating costs related to the consolidation of its textile operations. One plus point is the low fashion risk of basic company items, such as T-shirts, sweatshirts and knit sports shirts.
* CSG Systems International 's (CSG) loss of an arbitration ruling to Comcast has caused Moody's Investors Service to downgrade $269 million in credit facilities from Ba2 to Ba3. This reflects the lost revenues and cash flow CSG will experience as a result of the award and related price reduction to its largest client Comcast, notes Moody's.
CSG has to pay Comcast $119.6 million and revenues from Comcast will decrease by approximately $13.5 million per quarter beginning in the fourth quarter of 2003. The decision led the company to go to its banks for an amendment for the fourth quarter of 2003 in order to avoid covenant violation. As part of the amendment, CSG's $100 million revolver was downsized to $40 million.
Although CSG has debt maturities of only about $15 million in 2004, the company has agreed to make a voluntary prepayment of $30 million to the term loans by August. CSG will pay a 75 basis point increase in the spread it pays on its funded debt, according to a statement from the company. Calls to a spokeswoman were not returned by press time.