S&P lowers Flint to negative

Standard & Poor’s said it revised to negative from stable the outlook on the long-term corporate credit rating on Flint Group.

The agency also said it affirmed the company’s B+ rating and assigned a B+ issue rating and 3 recovery rating to the first-lien debt, including the proposed additional term loan.

The 3 recovery rating indicates 50% to 70% expected default recovery.

S&P also said it affirmed the B- issue rating and 6 recovery rating on the second-lien debt, indicating 0 to 90% expected default recovery.

Flint recently announced it is acquiring Xeikon for €228 million, plus fees. Flint is expected to fund the deal with an additional €150 million term loan B issuance and cash from its balance sheet, which will result in slightly higher leverage, the agency said.

The outlook revision reflects an opinion that Flint’s relatively high gross debt will not reduce following news of the acquisition, S&P said.

De-leveraging will take longer than initially anticipated, the agency said, as free operating cash flow generated in recent years has been solely spent on acquisitions.

But, Flint’s leverage and interest coverage ratios will only marginally deteriorate, S&P said.

Xeikon is viewed as a strategically good fit for Flint’s packaging business and supports Flint’s fair business risk assessment, the agency added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.