S&P moves Barentz view to negative

S&P said it revised its outlook for Barentz Midco BV to negative from stable and affirmed the B ratings on the company and its debt facilities. The company’s loans were issued through Barentz Finco UK Ltd. and Barentz Bidco BV.

Barentz wants to amend and extend its capital structure, extending the maturities of its term loan B to February 2031 while increasing its U.S. dollar TLB exposure through a reduction in its euro TLB exposure and by repaying the pound sterling TLB with balance sheet cash.

Following an increase in the euro-denominated TLB in 2023, Barentz plans to raise more debt in the coming months. The company expects to receive €80 million from a fungible add-on and is expected to put in place a €120 million factoring facility of which Barentz intends to draw €60 million in the coming months.

In a press release, S&P noted it forecasts revenue growth of 3%-4% in 2024 and expects “a softer than initially anticipated recovery in the company's S&P Global Ratings-adjusted EBITDA.”

The agency said, “The negative outlook reflects that we could lower the rating by one notch within the next 12 months if Barentz experiences EBITDA margin pressure or adopts more aggressive financial policies leading to funds from operations (FFO) cash interest coverage remaining below 2x and leverage above 7x.”

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