S&P rates CBR Fashion notes B, revolver BB-

S&P said it assigned a preliminary B long-term corporate rating to CBR Fashion Holding GmbH.

The agency also said it assigned a preliminary B rating to the proposed €450 million fixed-rate senior secured notes due in 2022 with a recovery rating of 4, indicating 30% to 50% expected default recovery.

The notes will be issued by the financial subsidiary CBR Fashion Finance BV and guaranteed by CBR and certain subsidiaries.

S&P also said it assigned a preliminary BB- rating to the €30 million super senior revolving credit facility.

The recovery rating on the super senior debt is 1, indicating 90% to 100% expected default recovery.

The proposed super senior revolving credit facility will be issued by CBR Fashion GmbH, a wholly owned subsidiary of CBR.

The outlook is stable.

CBR designs and sells womenswear products, enjoying a No. 5 position in the fragmented mainstream segment of the German womenswear market, S&P said.

In 2016, the group reported €583 million of revenues and €87.7 million of EBITDA, while generating roughly €30 million of free operating cash flow, the agency said.

The preliminary rating reflects a view that the group maintains a solid position in its core markets, where it competes through two independent brands, Cecil and Street One, S&P said.

The agency said it believes these two brands have a solid customer base in Germany, but that their ability to attract new customers is limited.

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