Fitch rates Rexel notes BB-

Fitch Ratings said it assigned Rexel, SA's proposed €500 million senior unsecured notes due 2018 an expected rating of BB-.

The guarantee structure and covenants of the notes resemble those of the existing issued notes, aggregating €660 million as of March 31, Fitch said.

The transaction will not result in any incremental debt for the group as the bond issue will repay existing debt, the agency said.

Although when completed, it will help extend the final debt maturity from 2014 to 2018, Fitch said.

The draft terms of the new notes contain similar limitations on the incurrence of indebtedness as the existing notes, subject to a minimum consolidated coverage ratio of 2.25x, the agency said.

But certain debt carve-outs are higher, such as overdrafts and additional allowed indebtedness. This is aimed at giving Rexel extra flexibility to pursue its growth strategy and be able to fund higher working capital requirements emanating from future sales growth, Fitch said.

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