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S&P rates Redhalo Midco (UK) loan B
S&P said it assigned B issue-level and 3 recovery ratings to the 430 million term loan B-3 to be issued by one.com Group AB and sotus 860.GmbH, subsidiaries of Redhalo Midco (Uk) Ltd., the owner of group.one. The 3 recovery rating indicates meaningful (50%-70%; rounded estimate: 60%) recovery default.
The ratings are in line with those on the outstanding loans.
The term loan is part of group.one's plans to reprice its existing debt facility B-1. We think the transaction will improve the company's cash flow thanks to an annual interest savings of about 10 million. The like-for-like debt issuance of 430 million will carry an interest margin of a low 4%, versus the higher 6.5% margin on the current term loan B-1.
These savings, together with our expectation of strong EBITDA growth in 2024, should drive the company's free operating cash flow to more than 60 million, compared with our estimate of less than 30 million in 2023 on a pro forma basis. group.one is also increasing its revolving credit facility (RCF) to 120 million, from 80 million, and canceling its 100 million acquisition capex facility, S&P said in a press release.
The outlook is stable.
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