S&P boosts Atalian, rates notes CCC+

S&P said it raised its rating on La Financiere Atalian SAS to CCC+ from D, withdrew the D rating on its senior unsecured debt following a debt exchange and assigned a CCC+ issue-level rating to the new senior secured notes due 2028 along with a recovery rating of 4, reflecting average (30%-50%, rounded estimate: 35%) recovery prospects in default.

The debt restructuring lightened Atalian's debt burden and cash interest costs, thus improving liquidity. Post debt restructuring, Atalian's financial debt includes mainly €836.4 million senior secured notes due 2028, which pays cash interest at 3.5% along with payment-in-kind interest at 5% compounded annually.

“We forecast Atalian will pay about €58 million as total cash interest in 2024 including interest on financial debt, factoring, and leases (including about €15 million paid toward the old capital structure, settled toward the end of March 2024). Cash interest expense will be about €52 million in 2025, which is significantly lower than the €71.5 million cash interest paid in 2023,” S&P said in a press release.

The agency, however, noted Atalian relies on its €250 million factoring facility to manage its working capital needs, with €213 million outstanding as of Dec. 31, which is due in September. Atalian is working to renew the loan.

The outlook is stable.

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