S&P rates Rexel notes BB-

S&P said it affirmed the BB long-term and B short-term corporate credit ratings on Rexel SA.

The outlook remains stable.

The agency also said it assigned a BB- rating to the company's proposed €300 million senior unsecured unguaranteed notes.

The recovery rating is 5, indicating about 10% expected default recovery.

S&P also said it affirmed the BB- ratings on Rexel's unsecured and unguaranteed €982 million revolving credit facility, $500 million notes due in 2020, €500 million notes due in 2020, and €650 million notes due in 2023.

The recovery rating on all instruments is unchanged at 5, indicating about 10% expected default recovery.

The ratings reflect Rexel's performance in 2016, which was broadly in line with expectations, the agency said.

In 2017 through 2019, S&P said it expects EBITDA margins and credit metrics to gradually improve and remain commensurate with the current rating.

This improvement will be supported by a recovery in organic sales growth forecast in France, the agency said, and by some stabilization in the still weak North American oil and gas industrial segment, and in China.

S&P also believes that higher copper prices could boost the company's top-line growth and margins.

Rexel's aggressive financial risk profile continues to constrain the ratings, the agency added.

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