S&P gives Delivery Hero, loans B-

S&P said it gave B- ratings to Delivery Hero SE and its planned senior secured term loans for $825 million and €300 million. The recovery rating on the loans is 3, indicating meaningful (50%-70%; rounded estimate: 65%) recovery prospects in default.

The company will also secure a multicurrency €375 million senior secured revolving credit facility for general corporate purposes. The loans will be borrowed by wholly owned subsidiaries, New German Finco and New US Finco.

“We expect Delivery Hero will continue to post negative free operating cash flow over the next two years, but its ample cash balance, teamed with the proposed term loan and available new RCF, will support growth and investment until the group achieves positive EBITDA margins,” S&P said in a press release.

The outlook is stable. As of Dec. 31, Delivery Hero had a €2.4 billion cash balance. “The stable outlook reflects our view that Delivery Hero should be able to absorb and gradually reduce operating losses, on the back of ample liquidity, and fulfill its financial obligations over the next 12-24 months,” the agency said.

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