S&P rates Tech Finance loan, notes B

Standard & Poor's said it assigned a B rating to Tech Finance & Co SCA's proposed €745 million term loan facility due 2020 and $330 million senior secured notes due 2020.

Tech Finance is an orphan special purpose vehicle that will engage in certain financing activities relating to Technicolor SA.

The new debt amounts are based on 90% tender on the loans and 75% tender on the notes and might vary according to the success of the transaction, S&P said.

The rating on the underlying proceeds loans to Thomson Licensing is B, the agency said. The recovery rating is 3, reflecting 50% to 70% expected default recovery.

S&P also said it assigned a B long-term corporate credit rating to Thomson Licensing SAS.

The outlook is stable.

The agency also said it placed the B ratings on the existing bank facilities and notes at Technicolor level on CreditWatch with negative implications.

Thomson Licensing is viewed as a strategically important subsidiary of Technicolor, the agency said.

The issuance structure is particularly complex. But, the equalization of the issue rating on the proposed debt to be issued by Tech Finance reflects a view that the proposed notes and loans will benefit from a direct pass-through of the economic benefit of the back-to-back proceeds loans borrowed by Thomson Licensing, S&P said.

The ratings are constrained by the complexity and documentation risks in the proposed structure, fairly weak security package, prior ranking debt in the waterfall and a view of the relatively unfavorable insolvency jurisdiction in which Technicolor operates, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.