S&P puts WFS Global on positive watch

S&P said it placed its B- long-term issuer credit rating on WFS Global Holding SAS and the issue ratings on CreditWatch with positive implications.

The recovery rating on the debt remains at 3, reflecting an expectation of meaningful recovery (50%-70%; rounded estimate: 65%) in the event of a payment default. The recovery rating on the senior unsecured notes due 2022 remains 6, reflecting an expectation of negligible recovery (0%-10%; rounded estimate: 0%) in the event of a payment default.

The rating action follows the announcement by Cerberus Capital Management LP that it will acquire WFS from Platinum Equity LLC. The group plans to finance the acquisition and refinance its existing capital structure through the issuance of new €660 million senior secured notes due 2023, supported by a €100 million senior secured revolving credit facility, which will be undrawn at closing.

“We believe there is an increased likelihood of an upgrade if the transaction goes ahead as planned and the new owner is able to refinance the company's outstanding debt,” S&P said in a news release.

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