S&P assigns Reynolds loan BB+

S&P said it assigned a preliminary BB+ with a 2 recovery rating to Reynolds Consumer Products Inc.’s proposed $2.725 billion secured bank credit facility. The 2 recovery rating indicates creditors could expect substantial (70%-90%; rounded estimate: 70%) recovery in the event of a payment default.

Reynolds Consumer announced plans to complete an initial public offering and enter a $2.725 billion secured bank credit facility. The aggregate net proceeds of which will be distributed to Reynolds Group Holdings Ltd.

S&P also assigned a preliminary BB rating to Reynolds. “RCPI has strong market shares in low-growth but stable categories. Its portfolio is characterized by products with very high consumer awareness and the number one or two position in their respective categories, which in aggregate total more than $9 billion at retail. In particular, the Reynolds cooking and baking unit holds more than 50% market share in foil, bakeware and cooking accessories (a strong majority of which is generated from branded product sales),” said S&P in a press release.

The outlook is stable.

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