S&P assigns B to Fedrigoni notes

S&P said it assigned a B rating to the planned €665 million of senior secured floating-rate notes Fiber Bidco SpA (Fedrigoni) plans to sell.

Concurrently, the agency affirmed its B ratings on the company and its €1.1 billion senior secured notes due 2027 but revised the outlook to negative from stable.

Fedrigoni intends to repay its €735 million of floating-rate notes this month by selling €665 million of six-year floating-rate notes, raising a €90 million government-backed loan and completing a sale-leaseback transaction to receive €132 million from a total of €265 million. It also plans to upsize its revolving credit facility to about €180 million.

“The negative outlook reflects our view that a slower-than-expected economy may limit Fedrigoni's ability to improve leverage over the coming year, following higher-than-expected debt levels at end-2023.In 2023, the company's gross debt rose about €110 million to €1.9 billion. The increase stemmed primarily from €130 million additional lease liabilities from sale and lease back transactions (approximately €85 million) and new machinery (roughly €45 million). This was partly offset by lower factoring utilization (as sales decreased in 2023),” S&P said in a press release.

The agency warned it could downgrade Fedrigoni’s ratings over the next 12 months if Fedrigoni's EBITDA interest coverage drops below 1.5x or FOCF goes negative or at nil, while the company's leverage stays sustainably above 7x.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.