S&P rates Cosan notes BB

S&P said it assigned a BB rating to Cosan Luxembourg SA's proposed senior unsecured notes with a recovery rating of 3, indicating 50% to 70% expected default recovery.

Cosan Luxembourg' parent, Cosan SA Industria e Comercio, will unconditionally guarantee the notes.

The proceeds will be used to fund the company’s proposed tender offer for its outstanding 2018 and 2023 senior notes.

Additionally the company's parent, Cosan Ltd., may spin off Comgas from Cosan SA into a new sister holding called Comgas Holding, S&P said.

If this occurs within 36 months from the debt issuance's date, both issuer and guarantor may be replaced by either Companhia de Gas de Sao Paulo – Comgas or Comgas Holding, the agency explained.

The replacement also would be conditional on either substitute company having a net debt-to-EBITDA maximum ratio of 3.5x and a credit rating equal or higher than the one on Cosan SA prior to the substitution, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.