S&P puts Autodis on watch

Standard & Poor’s said it placed the B+ long-term corporate credit rating on Autodis Group SAS on CreditWatch with negative implications.

The agency also said it placed the B+ rating on the company’s senior secured notes and BB- rating on its super senior revolving credit facility on negative watch.

The recovery rating on the senior secured notes is unchanged at 4, reflecting 30% to 50% expected default recovery.

The recovery rating on the revolver is unchanged at 2, reflecting 70% to 90% expected default recovery.

The CreditWatch placement follows news of the company’s will likely sale to Bain Capital, S&P said.

The transaction is currently being discussed by Autodis’s shareholders, Towerbrook Capital Partner and Investcorp, along with and Bain Capital, the agency said. The transaction would be subject to anti-trust approval.

Towerbrook and Investcorp became shareholders in Autodis in 2009 and 2006 respectively, and control 63% and 18% of its equity.

The proposed transaction could lead to higher debt on the company’s balance sheet because as it is expected to be funded mainly through new debt, S&P said.

The resulting weakening of leverage metrics may not be commensurate with the company’s current financial risk assessment or ratings, the agency added.

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