S&P rates Unilabs loan B

S&P said it affirmed the B long-term corporate credit rating on Unilabs Holding AB.

The agency also said it assigned a B rating to the proposed €685 million term loan B due 2021 with a recovery rating of 4, indicating 30% to 50% expected default recovery.

The outlook is stable.

The affirmed ratings follow news that the company is raising the new loan to refinance its existing senior secured notes totaling €485 million and partially repay the second-lien payment-in-kind (PIK) toggle notes by €151 million, S&P said.

The group also intends to repay the €31 million currently drawn under its revolving credit facility and extend the maturity of the agreement from 2017 to 2021, the agency said.

S&P said it expects the group to significantly reduce its weighted average cost of debt in the refinancing transaction.

The proposed transaction also is considered positive in terms of the company’s refinancing risks, the agency said.

Despite the cash interest bearing debt increasing by €200 million, the company's overall cost of debt is going down and the maturity of the majority of cash-paying debt has been extended by four years, S&P said.

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