S&P rates Transcom notes B

S&P said it assigned a preliminary B long-term issuer credit rating to Transcom TopCo AB.

The outlook is stable.

The agency also said it assigned a preliminary B rating to Transcom's proposed €180 million senior secured notes.

The preliminary recovery rating on this facility is 4, indicating 30% to 50% expected default recovery.

The rating assignments follow Transcom's proposed refinancing after the acquisition by private equity fund Altor, S&P said.

The agency said it understands that Transcom will use the proceeds from its proposed €180 million senior secured notes to refinance the existing €164 million facilities and retain €14 million in cash.

Transcom, owned by Transcom Holding AB, has relatively small-scale operations in the still-fragmented business process outsourcing market, S&P noted.

The company benefits from its leading market positions in Norway and Sweden, but its market shares are weak in the rest of Europe, Asia Pacific and North America, the agency said.

There also are risks related to the group's fairly high customer concentration with the largest customer representing about 12% of revenues and the 10 top customers contributing about 60% of revenues in 2017, S&P said.

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