S&P ups, rates Belron loans BB+

S&P said it upgraded Belron Group SA’s and its financing subsidiaries’ issuer ratings to BB+ from BB and assigned BB+ and 3 recovery ratings to its proposed term loans. Concurrently, the agency raised Belron’s senior secured facilities to BB+ from BB with an unchanged 3 recovery rating and assigned a BB+ rating to its new financing subsidiary, Belron Luxembourg Sarl.

“The upgrade reflects our expectation of continued resilient performance over the fiscal year 2021-2022. We project that Belron's S&P Global Ratings-adjusted EBITDA margins will remain at 21%-22% over the next few years following an improvement to 21.6% in fiscal year 2020 (ending Dec. 31, 2020), and average free operating cash flow (FOCF) of €525 million for fiscal years 2021 and 2022,” the agency said in a press release.

Belron plans a €1.462 billion dividend recapitalization and refinancing its €525 term loan due in 2024. The company plans to secure €1.575 billion of first-lien term loan (U.S. dollar and euro tranches), with €1.05 billion of loan proceeds and €412 million in balance-sheet cash financing the dividend.

The outlook is stable.

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