S&P may raise Dixie Group ratings
Positive implications means the ratings could be raised or affirmed following Standard & Poor's review.
"The CreditWatch placement reflects Dixie's recent announcement that it has signed a definitive agreement to sell certain assets that support its factory-built housing, needlebond, and carpet recycling businesses," said credit analyst Martin S. Kounitz. Standard & Poor's expects that Dixie will use the net proceeds of the transaction to repay debt. Accordingly, if the transaction is completed, ratings could possibly be raised one notch. The transaction is subject to regulatory approvals.
The transaction allows Dixie management to focus on its higher margin products. After the asset sale, Dixie's remaining businesses will include premium-priced residential and commercial carpet manufacturing.
Standard & Poor's will meet with management to discuss its business and financial plans.