S&P assigns Delachaux CCR, loan B+

Standard & Poor's said it assigned a B+ long-term corporate credit rating to Delachaux SA.

The outlook is stable.

At the same time, the agency assigned a B+ long-term issue rating to Delachaux's proposed €765 million senior secured term loan maturing in 2021, consisting of a term loan and a credit facility issued by Sodelho SAS. The recovery rating is 4, indicating an expectation of average (30%-50%) recovery in the event of a payment default.

S&P said the ratings on Delachaux are constrained by its view of the company's high leverage. The agency believes that over the next two or three years, Delachaux's S&P’s adjusted debt-to-EBITDA ratio will remain between 7 times and 8 times, which it classifies as "highly leveraged" according to criteria.

Following the planned refinancing, S&P expects the company's debt to consist of a senior secured bank loan of €688 million maturing in 2021 and a €170 million subordinated non-cash-paying preferred equity certificate that it treats as debt under the criteria, down from €437 million before the refinancing.

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