S&P upgrades Befesa

S&P said it raised its rating for Befesa SA to BB+ and affirmed the BB+ rating on the company’s senior secured debt. The agency also revised the recovery rating on the debt to 3 from 2.

The company plans to buy American Zinc Recycling for $450 million, mostly with equity.

“Befesa's financial policies underpin the rating because they allow the company to gradually expand while keeping leverage at relatively low levels and providing visibility on future cash flows through an extended hedge book. The debt-friendly structure of the acquisition is in line with our previous view of the company's supportive financial policy, including reported net debt to EBITDA below 2x, an extensive hedge book, comfortable debt maturities, and a dividend policy linked to its actual profitability,” S&P said in a press release.

The outlook is stable.

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