S&P changes Coveris view

S&P said it revised its outlook on Coveris Holdings SA to positive from developing and affirmed the B- long-term issuer credit rating.

At the same time, the agency affirmed the B- issue rating on the euro-denominated term loan due in June 2022 borrowed by Coveris. The recovery rating is unchanged at 3, indicating an expectation of meaningful (50%-70%; rounded estimate 60%) recovery in the event of payment default.

S&P said the affirmation follows Coveris' announcement that it agreed to sell its Americas business to Transcontinental for around $1.32 billion.

“This transaction will make Coveris a smaller, primarily European-based group with a larger portion of sales from the lower margin, more commoditized flexible packaging products,” the agency said in a news release.

S&P said the positive outlook reflects an expectation that it might raise the ratings if Coveris' operating performance improves on a sustainable basis over the next 12 months, alongside expected deleveraging as a result of the sale of the Americas business, the proceeds of which are anticipated to be used to repay debt.

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