Moody’s rates Flamingo Lux B2

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability default rating to Flamingo Lux II SCA, a direct parent of Foncia Management SAS, and the top entity of the new restricted group following the dividend recapitalization.

Concurrently, Moody's gave B2 ratings to the new €437.5 million senior secured revolving credit facility and €1.275 billion term loan B by Foncia Management. The outlook on Flamingo Lux II SCA is negative, and the outlook on Foncia Management SAS was changed to negative from stable.

Term loan proceeds, together with an additional €400 million of secured debt and €250 million of unsecured debt will mainly be used to pay a dividend distribution of €475 million and refinance debt.

The B2 ratings on the senior secured credit facilities at Foncia Management remain unchanged and will be withdrawn upon closing of the transaction. Moody's withdrew the B2 CFR and B2-PD PDR of Foncia Management.

"The negative outlook reflects the risk that Foncia's credit metrics will remain weak for the current B2 CFR over the next 12-18 months due to the material releveraging effect of the envisaged dividend recapitalization," said Brad Gustafson, a Moody's vice president, senior analyst and lead analyst for Foncia, in a press release. "Weak macroeconomic conditions or lower-than-expected benefits from strategic initiatives including the new ERP could hinder organic EBITDA growth, and result in Moody's-adjusted debt/EBITDA remaining above 6.5x and free cash/flow debt not improving towards 5% over the next 12-18 months, added Gustafson.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.