S&P rates Financiere Verdi I B

S&P said it assigned B ratings to Ethypharm’s parent Financiere Verdi I SAS and its planned €270 million term loan due 2028. The recovery rating is 3, indicating a recovery of about 50% in default. The company also plans to secure a £245 million term loan.

“Ethypharm's earnings stability benefits from strong positions in niche therapeutic areas of pain and addiction in Europe, which are highly regulated, but is constrained its by modest size in competitive generic pharmaceuticals and some portfolio concentrations,” the agency said in a press release.

The outlook is stable. The outlook mirrors the position that Ethypharm's focus on new product launches, expansion in direct sales and improved capacity in its U.K. factory will enable gradual S&P Global Ratings-adjusted margin improvement to 25%-26% in the next 12 months, translating to FOCF of about €30 million, cash-paying leverage of about 6x, and funds from operations (FFO) cash interest coverage of about 3x, the agency said.

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