S&P provides B to Faerch, facilities

S&P said it assigned a preliminary B long-term corporate credit ratings to Roy Midco ApS and Roy Bidco ApS, the holding companies of Faerch Plast Group AS.

The outlook is stable.

At the same time, the agency assigned a preliminary B rating to the proposed senior secured facilities to be issued by Roy Bidco, comprising a €300 million term loan, €110 million term loan B2 and a €65 million revolving credit facility. The recovery ratings are 4, indicating a view of meaningful recovery prospects (30%-50%; rounded estimate 45%) in the event of a default.

S&P said the preliminary ratings reflect its view of Faerch Plast's small size, relatively narrow scope, high leverage as a result of an aggressive financial policy and growth-oriented strategy.

These constraints are only partly mitigated by strong profitability stemming from a well-invested asset base and successful innovation strategy, the agency added.

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