S&P rates Ephios CCR B+, notes B-

Standard & Poor's said it assigned its preliminary B+ long-term corporate credit rating to Ephios Holdco II plc, a holding company for the consolidated European laboratory businesses of Synlab Holding GmbH and Labco SA.

The outlook is stable.

At the same time, the agency assigned a preliminary issue rating of B- to the €375 million proposed senior unsecured notes to be issued by Ephios Holdco II. The recovery rating is 6, reflecting an expectation of negligible (0%-10%) recovery for debtholders in the event of a payment default.

S&P also affirmed the preliminary B+ long-term corporate credit rating on Ephios Bondco plc, the parent holding company of Labco, and the preliminary B+ long-term issue rating on its proposed €1,475,000,000 senior secured notes due in 2022, which includes a tap issuance of €675 million. The recovery rating on the notes is 4, indicating an expectation of average (30%-50%) recovery in the event of a payment default.

Labco’s B+ long-term corporate credit rating and the B+ issue rating on its existing €700 million senior secured notes due in 2018 were also affirmed. The recovery rating on the notes is 4, indicating an expectation of average (30%-50%) recovery in the event of a payment default.

S&P said the actions follow private equity firm Cinven's acquisition of Synlab. As part of the acquisition, a new holding company called Ephios Holdco II plc was created above the existing Ephios Bondco, which is the parent of Cinven's other laboratory business, Labco.

Under the proposed transaction, Ephios Holdco and Ephios Bondco will both raise new debt to fund the acquisition of Synlab.

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