S&P rates Lycra notes B

S&P said it assigned its B corporate credit rating to Eagle Super Global Holding BV (Lycra Co.). The outlook is stable.

At the same time, S&P said it assigned its B issue-level and 3 recovery ratings to the company's proposed $800 million senior secured notes, consisting of a roughly $300 million euro-equivalent tranche and a roughly $500 million U.S. dollar tranche. The 3 recovery rating reflects an expectation for meaningful (50% to 70%; rounded estimate: 55%) recovery in the event of a payment default. The borrower of the debt is Eagle Intermediate Global Holding BV.

China-based Shandong Ruyi Technology Group, along with several other co-investors, is acquiring U.S.-based Invista Equities' Apparel and Advanced Textiles business, which will be referred to as the Lycra Co.

S&P said it expects the transaction will close in the second quarter of 2018 and that it will be funded with a combination of about $800 million of newly issued notes (dollar- and euro-denominated), a $100 revolving credit facility (unrated) and about $1.7 billion of equity.

“The stable outlook on the Lycra Company reflects our expectation that the company will continue to grow volumes as a result of industry trends that require spandex, such as athleisure-wear and stretch jeans,” S&P said in a news release.

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