S&P rates Refresco B+

S&P said it assigned a B+ long-term issuer credit rating to Pegasus Bidco BV, parent company of Refresco, and B+ issue and 3 recovery ratings to its proposed €3.4 billion-equivalent first-lien term loan.

The outlook is stable.

On Feb. 22, private equity firm KKR announced an agreement to acquire a majority stake in the soft drinks bottling solutions provider Refresco from PAI Partners (PAI) and British Columbia Investment Management Corp. (BCI), who retain a significant minority stake.

The transaction is being financed by a proposed €3.4 billion-equivalent multi-currency first-lien term loan due 2029 and an equity contribution. The transaction also includes a new €500 million committed revolving credit facility to be undrawn at closing.

“The stable outlook reflects our view that Refresco should be able to smoothly integrate recent acquisitions and continue to offset high operating cost pressures,” S&P said in a news release.

“We anticipate it will maintain adjusted debt to EBITDA of between 6x-7x and improve free operating cash flow (FOCF after leases) to around €50 million in the next 12-18 months, following a period of high capital expenditure (capex) in 2022.”

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