Fitch lowers HP Pelzer notes to BB-/RR2

Fitch Ratings said it affirmed HP Pelzer Holding GmbH's issuer default rating at B with a stable outlook and downgraded the senior secured rating to BB-/RR2 from BB/RR1.

Fitch said the downgrade of the senior secured notes does not reflect a deterioration in the credit quality of Pelzer, but a change in the recovery analysis of the company's €280 million bond, based on a slight increase in gross debt over 2015, reclassification of a portion of local debt as super senior and a somewhat lower multiple applied to the going concern value of the business.

The lower multiple stems from the agency’s reassessment of the recovery prospects related to operations in countries such as China and Turkey, in which Pelzer has joint ventures and where the enforceability of creditor claims may be variable.

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