S&P assigns B to Sulo, loan

S&P said it assigned preliminary B ratings to Sulo SAS and its planned €350 million term loan. The preliminary recovery rating on the loan is 3 (rounded estimate 55%), indicating meaningful recovery if the borrower defaults. The outlook is stable.

“Our preliminary rating on Sulo is constrained by the group's private equity ownership. Although we forecast that adjusted leverage will be comfortably below 6x in 2024, we also factor into our assessment that the group is owned by a financial sponsor. The group's majority owner, Latour Capital, has a long-term investment horizon and we note that Sulo is less leveraged than other private equity-owned rated peers,” S&P said in a press release.

Sulo will use the new senior secured floating-rate loan to repay the €154 million outstanding unitranche and the about €144 million convertible bonds outstanding, including payment-in-kind interests, and to repay about €30 million of preferred shares owned by majority shareholder Latour Capital. The group will use the rest to pay issuance costs and keep about €10 million in cash for other corporate uses.

S&P said it expects Sulo’s leverage to rise slightly to 5.5x from about 5x in 2023. However, it expects increased EBITDA will enable the group to deleverage to 5x in 2025, assuming the capital structure remains unchanged.

© 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.