S&P: Sivantos loans B+, notes B-

Standard & Poor’s said it assigned a B+ long-term corporate credit rating to Auris Luxembourg II Sarl (Sivantos).

Auris is a Luxembourg-based holding company set up for the acquisition of hearing instruments manufacturer Sivantos Group by a consortium of investors led by Swedish private equity firm, EQT.

S&P also said it assigned a B+ rating to the €75 million revolving credit facility and the €785 million first-lien term loan to be issued by Auris III Luxembourg Sarl.

The agency also said it assigned recovery ratings of 3 to these instruments, indicating 50% to 70% expected default recovery.

The agency also said it assigned a B- rating to the €275 million senior unsecured notes to be issued by Auris Luxembourg II. The recovery rating on the notes is 6, indicating 0 to 10% expected default recovery.

The outlook is stable.

The ratings on Sivantos are constrained by its relatively small size, product concentration and the presence of innovation risk, S&P said.

The group’s majority financial sponsor ownership by EQT, with adjusted leverage of around 8.5x pro forma the transaction, underpins the company’s highly leveraged financial risk profile assessment, the agency said.

The ratings also reflect Sivantos’ strong free cash flow generation and cash interest coverage, S&P said.

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