S&P rates Peer loan B+

S&P said it affirmed the B+ long-term corporate credit rating on Peer Holding BV, the parent of Action Holding BV.

The outlook is stable.

The agency also said it assigned a B+ rating and 3 recovery rating to the new €475 million senior secured term loan due in 2022. The 3 recovery rating indicates 50% to 70% expected default recovery.

S&P also said it affirmed the B+ rating and 3 recovery rating on the group's €75 million revolving credit facility due in 2021 and existing €1.125 billion senior secured tranche of its term loan B due in 2022.

The ratings reflect Peer Holding's highly leveraged financial risk profile and satisfactory business risk profile, the agency said.

The transaction represents the fourth major dividend recapitalization since 3i Group plc and investment entities managed by 3i Group companies acquired Action in 2011, S&P explained.

Following dividend recapitalizations in 2013, 2015 and February 2016, the group has rapidly reduced leverage on the back of EBITDA growth and cash flow generation, the agency said.

The company achieved this through a successful store expansion strategy, which led to strong sales and profit growth, S&P said.

The proceeds from the new loan, together with cash on the balance sheet of about €35 million, will be used to distribute dividends of €500 million and pay about €10 million in transaction fees, the agency said.

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