S&P affirms Refresco after loan increase

S&P said it affirmed the BB long-term corporate credit rating on Refresco Group BV.

The outlook is stable.

The agency also said it affirmed the BB rating on the €722 million term loan B due 2021 with a recovery rating of 3, indicating 50% to 70% expected default recovery.

The ratings follow Refresco's recent acquisitions, including DIS and Whitlock Packaging, after the company increased its syndicated loan facility to €722 million, S&P said.

The new facility now expires in July 2021 and includes a revolving credit facility of €150 million, which is currently undrawn, the agency said.

The acquisitions are considered consistent with the company's buy-and-build strategy, S&P said.

The agency also said it expects earnings contributions over the next 12- to 18-months to support the company’s significant financial risk profile assessment.

Refresco remains a market leader in the fragmented bottling and packaging industry, S&P said, with strong positions in large European consumer markets.

But the group does have significant exposure to private-label production, which generally has lower margins and shorter contract profiles than branded production, the agency added.

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