S&P rates Cydsa notes BB

S&P said it assigned its BB issue-level rating on Cydsa SAB de CV's proposed up to $370 million Rule 144A and Regulation S up to 10-year senior unsecured notes bearing a fixed interest rate subject to market conditions.

At the same time, S&P said it is assigning a recovery rating of 4 on the notes, indicating an expectation for a meaningful (30% to 50%) recovery in the event of a payment default.

S&P’s ratings on Cydsa, including the long-term and short-term corporate credit ratings, are unchanged.

Cydsa plans to use most of the proceeds to refinance the entirety of its outstanding debt, including its syndicated loan due 2022 and a bridge loan granted by Goldman Sachs.

“We expect the proposed transaction to improve Cydsa’s debt maturity profile, extending the average lifespan of its debt from about three years to about 10 years, further supporting our assessment of the company's adequate liquidity. Additionally, we consider that the transaction will set all Cydsa’s debt at a fixed rate, thus eliminating its exposure to a fluctuation in interest rates,” S&P said in a news release.

In connection with the note offering, S&P said it is assigning a 4 recovery rating on Cydsa’s outstanding senior unsecured notes, indicating an expectation for an average (30% to 50%; rounded estimate: 40%) recovery in the event of payment default. The issue-level rating on the company's senior unsecured notes is BB, the same as the corporate credit rating.

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