S&P puts Rexel on positive watch

Standard & Poor's said it placed the B corporate credit ratings of Rexel SA and Ray Acquisition SCA on CreditWatch with positive implications, along with Ray's CCC+ €600 million senior subordinated notes due 2015 and B €2.1 billion senior secured facilities.

The agency said the CreditWatch placement follows the announcement that Rexel filed initial public offering documents with the French securities authorities and reflects the potential strengthening of Rexel's financial profile from the proposed IPO, which is expected to raise a minimum of €800 million in capital. The current €1.109 billion shareholder loan is expected to be repaid either through an additional capital increase or converted into equity.

Following the IPO, Rexel will remain majority owned by the group of private equity investors, including Clayton Dubilier & Rice, Eurazeo, Merrill Lynch Global Private Equity and others.

S&P said the current ratings on Rexel and Ray Acquisition balance the group's highly leveraged financial profile against its satisfactory business profile. The total debt-to-EBITDAR ratio was about 5x at June 30, 2006.

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