Fitch may boost Rexel

Fitch Ratings said it placed Rexel SA's issuer default rating of B+ on Rating Watch positive following the announcement of an initial public offering of new shares. The agency also said it placed other debt instruments on Rating Watch positive, including Rexel's BB and recovery rating of 2 on its senior secured facilities and Ray Acquisition's B- and recovery rating of 6 on its senior subordinated notes due 2015.

Using the proceeds to reduce its most expensive debt should strengthen Rexel's financial profile to a large extent, the agency said, providing additional flexibility to generate long-term growth. Based on estimated pro forma credit metrics, the resolution of the watch will likely result in one or two notch upgrade to BB- or BB, Fitch said.

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