S&P lowers Europcar bond

S&P said it revised its outlook on Europcar Groupe SA to positive from stable and affirmed the B+ long-term issuer credit rating.

At the same time, the agency lowered its issue rating on the €350 million fleet bond to BB- from BB and revised the recovery rating to 2 from 1, indicating an expectation of substantial recovery (70%-90%, rounded estimate: 80%) in the event of a payment default.

In addition, the agency affirmed the BB issue rating on the €500 million senior secured revolving credit facility due 2022. The recovery rating remains 1, indicating very high recovery (90%-100%, rounded estimate: 95%).

S&P also affirmed the B- issue ratings on the €1.2 billion senior secured notes due 2022 and 2024. The recovery rating remains 6, indicating negligible recovery (0%-10%, rounded estimate: 0%).

“The actions reflect our expectation that Europcar's credit metrics will strengthen in 2018 and 2019, following significant acquisition activity in 2017, and in spite of the industry's cyclicality, capital intensity and exposure to event risks,” the agency said in a news release.

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