S&P: Exopack loan recovery revised

Standard & Poor's said it revised the recovery rating on Exopack Holdings SA's senior secured term loan facilities to 3 from 4.

The 3 recovery rating indicates 50% to 70% expected default recovery. The improved recovery expectation results from the company's proposal to reduce the size of the senior secured term loan facilities to $675 million from $750 million while increasing the size of the new senior unsecured notes to $325 million from $250 million, S&P said.

The agency also said it affirmed the B rating on the term loan facilities. The B- and 5 recovery ratings on the company's senior unsecured notes are unchanged.

The B corporate credit rating on Exopack and stable outlook also are unchanged.

The ratings reflect an expectation that very aggressive financial policies and the fragmented and competitive plastic and paper packaging markets will offset the company's improved diversity and somewhat reduced debt leverage, S&P said.

The agency said it expects the company to benefit from some cost reductions and procurement savings.

S&P said it believes total adjusted debt-to-EBITDA will remain at more than 5x.

There also are some risks associated with achieving these cost savings and with the company's increased focus on European end markets, S&P said.

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