S&P rates Schustermann notes B, revolver BB-

S&P said it assigned a preliminary B long-term corporate credit rating to PrestigeBidCo GmbH, the parent of Schustermann & Borenstein.

The outlook is stable.

The agency also said it assigned a preliminary B rating to PrestigeBidCo's proposed €260 million senior secured notes. The recovery rating on the notes is 3, indicating 50% to 70% expected default recovery.

S&P also said it assigned a preliminary BB- rating to PrestigeBidCo’s proposed €35 million super senior secured revolving credit facility. The recovery rating on this instrument is 1, indicating 90% to 100% expected default recovery.

Private equity fund Permira is looking to acquire a majority ownership stake in Schustermann & Borenstein, S&P explained. The recently created holding company PrestigeBidCo will be used as the investment vehicle that will acquire Schustermann and provide the financing of the overall group, the agency said.

The ratings reflect the company’s limited scale of the company and its relatively aggressive financial policy that underpins the high leverage exceeding 5x, the agency said.

The ratings also consider Schustermann's track record of earnings growth, its well-established customer and supplier relationships and its robust interest cover metrics, S&P said.

The company's solid share in German off-price fashion market and its loyal and affluent invitation-only customer base with above-average frequency of purchases allow the company access to an attractive stock mix, the agency added.

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