S&P upgrades Geo Travel

Standard & Poor’s said it raised the long-term corporate credit rating on Geo Travel Finance SCA Luxembourg (eDreams Odigeo) by one notch to B+ from B.

The agency also said it removed the rating from CreditWatch with positive implications, where it was placed in March.

S&P said it raised the rating on its €130 million super senior revolving credit facility to BB-, the rating on the €325 million senior secured notes to B+ and the rating on the €175 million senior unsecured notes to B-.

The recovery ratings on the revolver, senior secured notes and senior unsecured notes are unchanged at 2, 3 and 6, respectively.

The upgrade follows eDreams Odigeo’s successful initial public offering and subsequent debt reduction, the agency said.

The company used its primary gross proceeds from the IPO to repay €46 million of its 10 3/8 % senior unsecured notes due 2019 at a redemption price of 107.781%.

S&P said it understands the company is looking to convert its shareholder loans into equity, but that has yet to happen.

eDreams Odigeo’s business risk profile is considered fair on the back of its leading position and brand recognition in the European online travel services sector with positive structural growth prospects over the next few years, the agency said, and a fairly flexible cost structure.

But, the industry is highly competitive with potential for new entrants and exposure to the cyclical and volatile airline travel market, S&P added.

© 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.