S&P cuts Financiere N

S&P said it trimmed its ratings for Nemera’s parent company Financiere N to B- from B. The agency also lowered the issue-level ratings on its senior secured first-lien term loan and revolving credit facility to B- from B. The recovery ratings on the debt facilities are unchanged at 3, although S&P said it now sees lower recovery prospects of 50% (60% previously) due to higher priority ranking liabilities.

Nemara plans to acquire an Eastern European medical device company with a €30 million add-on to its term loans. It is also increasing its use of factoring facilities, which will likely reach €50 million by end-2020 and grow to about €58 million by end-2021.

“We now forecast that S&P Global Ratings-adjusted leverage will remain about 8x over the next 12 months, with limited free operating cash flow (FOCF) due to relatively high capital expenditure (capex) needs. We do not view these indicators as supportive of a B rating,” S&P said in a press release.

The outlook is stable.

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