S&P revises Recipharm view to stable

S&P said it revised its outlook for Recipharm AB (Roar BidCo AB) to stable from positive and affirmed the B ratings on the company and its €1.115 billion term loan due 2028. The loan’s 3 recovery rating (estimated recovery of about 60%) is unchanged.

The agency noted reduced demand for some products and higher nonrecurring costs hurt sales and profitability.

Also, “Recipharm has launched multiple projects in 2022, causing its capex to rise to about SEK 1 billion-SEK 1.1 billion and exposing it to some execution risks. The company had previously budgeted capex of only around SEK 600 million,” S&P said in a press release.

The agency noted it revised the outlook because Recipharm’s S&P Global Ratings-adjusted debt to EBITDA spiked to about 11x in 2021. However, S&P projects metric will retreat to 7x-7.5x in 2022.

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