S&P rates Ulker Biskuvi Sanayi, notes B+

S&P said it gave B+ ratings to Ulker Biskuvi Sanayi AS and its planned senior unsecured notes. The company’s outlook is stable.

“We consider that Ulker’s material cash balances, relatively liquid financial asset portfolio and sizable cash deposit held at its ultimate parent, Yildiz Holding, mitigate refinancing risks. Yildiz Holding does not negatively affect Ulker’s credit standing, in our view,” S&P said in a press release.

The agency said it sees Ulker’s free operating cash flow positive in 2020 and 2021, despite exposure to significant foreign exchange risk because of how it sources raw materials and its mostly hard currency-denominated debt structure. S&P said it also forecasts S&P Global Ratings-adjusted (gross) debt leverage of 4x-5x and EBITDA interest coverage of about 3x-4x.

Proceeds will be used to complete the refinancing of the company’s capital structure.

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