Fitch rates Ephios notes B+, revolver BB-

Fitch Ratings said it assigned an expected issuer default rating of B to Ephios Bondco plc, the new holding company of Labco SA.

The outlook is stable.

Ephios Bondco is the new debt-issuing entity set up as part of the acquisition of Labco by private equity firm, Cinven, Fitch said.

The agency also said it assigned an expected B+ rating to Ephios’ proposed senior secured notes due 2022 with a recovery rating of RR3.

Fitch also assigned a BB- rating to its planned super senior revolving credit facility with recovery rating of RR2.

The new instruments and equity provided by Cinven, will be used to redeem Labco’s existing debt and pay for the acquisition, the agency said.

The proceeds will be down-streamed by way of intercompany loans to Labco SA, guaranteeing the notes, Fitch said.

The ratings reflect Ephios’ expected high funds from operations-to- adjusted gross leverage of about 8x at closing of the transaction, the agency said.

This ratio will remain at more than 6.5x at least until 2018, Fitch said.

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