S&P affirms Xella on IPO news

Standard & Poor’s said it affirmed the B+ long-term corporate credit ratings on Xella International SA.

The agency also said it affirmed the B+ rating and 3 recovery rating on the €215 million senior secured term loan G and €325 million senior secured notes issued by Xella’s special-purpose vehicle Xefin Lux SCA.

The 3 recovery rating indicates 50% to 70% expected default recovery.

The outlook is stable.

The ratings were affirmed following news that Xella plans to launch an initial public offering, S&P said.

The group aims to raise about €200 million through the process and will use the proceeds to reduce debt, the agency said.

However, it is not yet know whether Xella will convert existing shareholder loans in its capital structure into equity as part of the IPO process, S&P said.

Despite the potential for cutting debt, the agency said it considers it unlikely that the existing financial sponsor’s shareholding will reduce to less than 40% over the rating horizon, the agency added.

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