Fitch assigns BBB-/RR3 to Ineos bond

Fitch Ratings said it assigned Ineos Finance plc's proposed €500 million bond issue an expected senior secured rating of BBB-(EXP)/RR3(EXP).

In addition, the agency published the following recovery ratings: BBB-/RR3 to the €770 million senior secured notes due 2023 issued by Ineos Finance; BB/RR5 to the $500 million and €650 million subordinated notes due 2024 issued by Ineos Group Holdings SA; and BBB-(EXP)/RR3 (EXP) to Ineos Finance’s proposed euro term loan B due 2024 and Ineos US Finance LLC's proposed dollar term loan B due 2024.

The proposed senior secured bond expected rating is one notch above Ineos Group Holdings’ (Ineos) issuer default rating of BB+ and is aligned with the ratings assigned to Ineos Finance’s outstanding €770 million senior secured notes due 2023 and with the expected ratings of Ineos Finance and Ineos US Finance’s proposed senior secured term loans B due 2024.

Fitch said the BBB-(EXP)/RR3(EXP) ratings reflect its assessment of the structure and security of Ineos' senior secured debt, which is contractually and structurally senior to Ineos' subordinated debt and is likely to result in strong recoveries in a distressed scenario.

Conversely, the BB/RR5 ratings assigned to Ineos' subordinated euro and dollar notes due 2024 reflect the sizeable amount of prior ranking senior secured debt in the company's capital structure which is likely to result in poor recovery rates for these obligations, the agency explained.

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