S&P rates Rexel B, Ray Acquisition notes CCC+, loan B-

Standard & Poor's said it assigned its B long-term corporate credit rating to Rexel SA and to Ray Acquisition SCA, the acquisition vehicle that is owned by Rexel's financial investors. The outlook is stable.

In addition, S&P assigned its CCC+ senior subordinated debt rating to the proposed €600 million senior subordinated notes maturing in 2015 to be issued by Ray Acquisition. S&P also assigned its B- long-term senior secured bank loan with a recovery rating of 3 to the proposed €2.427 million senior secured facilities also issued by Ray Acquisition.

S&P said the ratings on the loan and the notes reflect the expected credit quality of Rexel upon the successful signing of about €1 billion of shareholder loans.

The rating on Rexel primarily reflects the group's weak financial profile, resulting from a heavy debt burden and thin cash flow protection measures, according to S&P.

The group's balance sheet is highly leveraged, with adjusted pro forma total debt to earnings before interest, taxes, depreciation, amortization and rent (EBITDAR) of about 7x at Dec. 31.

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