S&P changes Innovia view to positive

S&P said it revised the outlook on Innovia Group (Holding 3) Ltd. to positive from stable.

At the same time, the agency affirmed its B long-term corporate credit rating and B issue rating on the group's senior secured notes, with the recovery rating unchanged at 4.

S&P said the outlook revision follows Innovia's announcement that it is redeeming €80 million of its senior secured notes, which is expected to be completed on Aug. 26. The redemption was triggered by the sale of its cellophane business for €75 million.

The agency views the decision to use the proceeds to repay debt as positive with regards to financial policy, given the limited take-up of the mandatory notes offer.

S&P also said it views the sale of the cellophane business as broadly positive for business risk because, following the sale, it forecasts that fully S&P-adjusted EBITDA margins will markedly improve to about 19% from 12% in 2015 and, to a more limited extent, improved cash flow generation.

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