S&P rates Louis No. 1 notes B-

Standard & Poor's said it assigned its B- senior unsecured debt rating to the €430 million senior notes, due 2014 and to the €300 million senior subordinated notes, due 2016, issued by Louis No. 1 plc, the holding company for TNT Logistics.

"The notes are rated two notches below the corporate credit rating on Louis No. 1 (B+/stable), due to their subordination to a significant level of priority liabilities as well as limited potential for recoveries, with senior secured cover in the low end of the 80%-100% range," said S&P credit analyst Eve Greb.

The notes benefit from the same guarantee package as the senior secured facilities, with coverage of about 63% of EBITDA, the agency said, adding that the ratings on Louis No. 1 reflect the business and financial risk profiles of its main operating company, TNT Logistics.

As a result, the ratings are constrained by TNT Logistics' leveraged financial profile, weak credit measures and limited free cash flow generation, which will limit meaningful debt reduction, S&P said.

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