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S&P changes Flint outlook to negative
S&P said it revised the outlook on Flint Holdco Sarl to negative from stable and affirmed its B long-term corporate credit rating.
The agency also affirmed the B issue rating on Flint's senior secured debt, which includes its revolving credit facility and first-lien term loans. The senior secured debt is issued by a group of six co-borrowers but guaranteed by Flint. The recovery rating remains 3, indicating an expectation of meaningful recovery prospects of around 50%.
In addition, S&P affirmed the CCC+ issue rating on the second-lien senior secured debt. The recovery rating is 6, indicating an expectation of negligible recovery (0%-10%) in a default scenario, reflecting the contractual subordination in the debt structure.
S&P said the outlook revision follows its forecast that Flint's adjusted EBITDA will amount to about 320 million to 330 million in 2017. This is lower than the 360 million to 370 million forecast in February.
The deviation in the forecast is mainly caused by the agencys understanding of Flint's higher restructuring costs of about 40 million (compared with the expectation of 10 million) and transaction and compliance costs of 8 million. As per its criteria, S&P includes restructuring costs in its definition of EBITDA.
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