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S&P puts VAT on positive watch
Standard & Poor’s said it placed the B long-term corporate credit rating on VAT on CreditWatch with positive implications.
The agency also said it put the B rating on VAT’s $405 million senior secured term loan B due 2021 on positive watch.
The recovery rating on this instrument remains at 3, reflecting 50% to 70% expected default recovery.
The CreditWatch placement follows VAT’s launch of its initial public offering on the SIX Swiss Exchange, S&P said.
The transaction aims to enlarge the company’s shareholder base and will therefore have no cash impact for VAT, the agency said.
Because a shareholder loan of CHF 405 million has been converted into common equity, S&P said it considers the transaction will be positive for VAT’s credit profile based on an anticipation that its debt-protection metrics will improve.
The company’s debt-to-EBITDA ratio of about 2x to 2.5x is expected by year-end 2016, the agency said.
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