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S&P lifts Truvo, rates loan B, notes CCC-
Standard & Poor’s said it raised the long-term corporate credit rating on Truvo NV to CCC+ from D.
The agency also said it assigned a CCC+ long-term corporate credit rating to Stelara PIKco SA, a company that will be 100% owned by participating lenders and hold about 20% of Stelara NV.
The outlooks on both entities are negative.
S&P also said it assigned a B rating to the €15 million senior secured facility issued by Truvo Belgium Comm. V. The recovery rating on this facility is 1, reflecting 90% to 100% expected default recovery.
The agency also said it assigned a rating of CCC- to the €58 million payment-in-kind instrument issued at Stelara PIKco. The recovery rating on this instrument is 6, reflecting 0 to 10% expected default recovery.
S&P also said it withdrew the issuer and issue ratings on Talon PIKco NV, which no longer has a link to Truvo NV.
While Truvo’s debt restructuring has lightened its debt load, the group’s capital structure remains unsustainable in the long term, the agency said.
S&P also said it believes the group’s operations in the structurally declining directories business will remain under pressure, which will limit free cash flow generation.
Truvo completed its capital restructuring April 30 following unanimous consent from its lenders. The group’s financial restructuring resulted in a meaningful reduction of its cash-paid debt burden from €287 million of senior facilities to a €15 million term loan A, S&P said.
Despite the significant debt reduction, Truvo’s financial risk profile still is considered highly leveraged, the agency said, and its business risk profile is considered vulnerable.
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