S&P rates Redhalo Midco (UK) loan B

S&P said it assigned B issue-level and 3 recovery ratings to the €430 million term loan B-3 to be issued by one.com Group AB and sotus 860.GmbH, subsidiaries of Redhalo Midco (Uk) Ltd., the owner of group.one. The 3 recovery rating indicates meaningful (50%-70%; rounded estimate: 60%) recovery default.

The ratings are in line with those on the outstanding loans.

“The term loan is part of group.one's plans to reprice its existing debt facility B-1. We think the transaction will improve the company's cash flow thanks to an annual interest savings of about €10 million. The like-for-like debt issuance of €430 million will carry an interest margin of a low 4%, versus the higher 6.5% margin on the current term loan B-1.

“These savings, together with our expectation of strong EBITDA growth in 2024, should drive the company's free operating cash flow to more than €60 million, compared with our estimate of less than €30 million in 2023 on a pro forma basis. group.one is also increasing its revolving credit facility (RCF) to €120 million, from €80 million, and canceling its €100 million acquisition capex facility,” S&P said in a press release.

The outlook is stable.

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