S&P rates Draslovka, loans B

S&P said it assigned B ratings to Draslovka Holding AS, its $348 million senior secured term loan B and $30 million senior secured revolving credit facility, both due in five years.

Draslovka bought Chemours Mining Solutions for $520 million and funded the transaction with $348 million of term loans, $150 million of third-party-held preferred equity certificates, which the agency views as debt, and equity.

“We view the initial capital structure as highly leveraged, with pro forma S&P Global Ratings-adjusted debt to EBITDA estimated at 6.7x at year-end 2021 including PECs (about 4.7x excluding PECs), based on pro forma adjusted EBITDA of about $75 million last year,” S&P said in a press release.

The negative outlook reflects the risk of a lower rating if European market conditions become more challenging. Additionally, if the decline in Draslovka's EBITDA and FOCF this year were more severe than the agency’s base case, it could lead to liquidity weakening to less than adequate or leverage climbing to above 9x adjusted debt to EBITDA including PECs or above 6x excluding PECs without near-term recovery prospects, the agency said.

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