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S&P rates Techem loans B+, senior instruments B-
S&P said it assigned its preliminary B+ long-term issuer credit rating to Blitz F18-674 GmbH (Techem) and its wholly owned subsidiary, Blitz F18-675 GmbH. The outlook on both of these entities is stable.
At the same time, S&P said it assigned a preliminary B+ issue-level rating and 3 recovery rating to Blitz F18-675 GmbH's proposed €2.34 billion senior secured first-lien bank term loans and €275 million revolving credit facility, and our preliminary B- issue-level rating and 6 recovery rating to the €465 million senior instruments to be issued by Blitz F18-674 GmbH.
The 3 recovery rating reflects an expectations of meaningful recovery prospects of 50%-70% (rounded estimate 50%), while the 6 recovery rating indicates an expectation of negligible recovery (0%-5%) in the event of a payment default.
On May 25, Macquarie Infrastructure and Real Assets announced plans to sell Techem GmbH to a consortium of Partners Group, Ontario Teachers' Pension Plan, Caisse de dépôt et placement du Québec, and management, for an enterprise value of €4.6 billion.
To finance the transaction, Blitz F18-675 GmbH, Techem GmbH's new intermediate holding company, plans to issue €2.34 billion of senior secured loans. Its parent company, Blitz F18-674 GmbH, is also proposing €465 million senior instruments to fund the acquisition.
In addition, the consortium of financial sponsors will contribute €1.3 billion in the form of preferred equity and another approximate €0.6 billion of common equity.
The preliminary B+ rating on Techem reflects its satisfactory business risk profile and highly leveraged financial risk profile, S&P said in a news release.
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