Fitch rates Ecotone B

Fitch Ratings said it published Ecotone HoldCo III's long-term issuer default rating of B with a stable outlook. The agency assigned Ecotone's enlarged €490 million term loan a B senior secured rating with a recovery rating of RR4.

“The B IDR of Ecotone balances high financial leverage and an aggressive financial policy against a well-integrated business model characterized by solid sector-growth potential and strong free cash flow (FCF) generation. Its recent debt-funded shareholder distribution has temporarily lifted financial leverage above our 7x negative sensitivity, so any sustained underperformance versus our Fitch-case forecasts leading to slower deleveraging would likely lead to negative rating action,” the agency said in a press release.

The outlook reflects the forecast of continued demand for Ecotone's core brands and gradually improving profitability, due to the group's efficiency program, and tight cost controls, Fitch said.

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