S&P gives B to Nova Orsay, bond

S&P said it assigned preliminary B ratings to Nova Orsay SAS and its planned bond which will be issued through subsidiary Nova Alexandre III SAS. The preliminary recovery rating on the bond is 4 (45%). The outlook is stable.

Last month, Shareholders and the state-owned French investment bank Bpifrance closed an equity cash injection of €150 million in common equity, which the agency said it considers credit positive as it demonstrates the continuous support from shareholders if needed. Management will keep most voting rights through a golden share. As part of the transaction, Nova Orsay becomes the rated entity in S&P’s analysis as the ultimate parent which fully owns and consolidates the subsidiary entity Novafives, which will be merged with Fives SAS, and the issuing entity Nova Alexandre III, S&P said.

S&P said it expects the group to use the €150 million, balance sheet cash, and the proposed €425 million of senior secured notes due in 2029 to refinance both the €275 million senior secured floating-rate note and the €325 million senior secured fixed-rate note issued by Novafives, due in 2025.

Nova Alexandre III and Fives will sign a new super-senior revolving credit facility agreement at a forecast €140 million, which the agency said could be upsized by about €25 million, maturing, six months before the notes mature, at the end of 2028.

“We expect the group to deliver robust operating performance, with S&P Global Ratings-adjusted EBITDA to expand in 2024 to €155 million-€165 million from €146.6 million in 2023. This will be driven by continuous solid demand from its end markets, volume effects, and a higher share of higher margin after-market activities in the next years. We forecast debt to EBITDA to decrease significantly to 4.4x-4.6x in 2024 from 6.7x in 2023,” S&P said in a statement.

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