S&P cuts Energizer notes, rates new notes BB-

S&P said it assigned its BB- issue-level rating to Energizer Holdings Inc.'s proposed $500 million senior notes and Energizer Gamma Acquisition BV's proposed $750 million equivalent euro-denominated senior notes due 2026.

The recovery rating is 5, reflecting an expectation for modest recovery (10%-30%; rounded estimate 15% for the dollar tranche, and rounded estimate 20% for the euro tranche) in the event of a payment default.

The net proceeds will fund the pending acquisition of Spectrum Brands Inc.'s global battery and portable lighting business.

The agency also lowered the rating on the $600 million existing notes due 2025 to BB- from BB and removed them from CreditWatch, where they were placed with negative implications on Jan. 16. The recovery rating is 5, reflecting modest recovery (10%-30%; rounded estimate 15%).

“We lowered the existing unsecured debt and related recovery ratings because of the significant increase in secured and unsecured debt in the capital structure, despite the assumed increase in emergence enterprise value attributable to the acquisition,” S&P said in a news release.

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