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Fitch rates Synlab notes B+
Fitch Ratings said it assigned an expected rating of B+ with recovery rating of RR3 to Synlab Bondco plc's planned five-year €940 million senior secured notes.
The notes are expected to refinance Synlab's existing €775 million floating senior secured notes due in July 2022 to term-out revolving credit facility drawings and fund transaction fees.
The transaction is aimed at optimizing the group's cost of debt and improving liquidity to support further business growth, Fitch said.
The agency also said it has affirmed Synlab Unsecured Bondco plc's long-term issuer default rating at B with stable outlook.
Fitch also said it affirmed the existing instrument ratings for Synlab Bondco's super senior revolving credit facility at BB with recovery rating of RR1, its existing senior secured notes at B+ with recovery rating of RR3 and the senior notes issued by Synlab Unsecured Bondco at CCC+ with recovery rating of RR6.
The planned notes rank pari passu with the existing €900 million senior secured notes with the same security and guarantees offered to revolver creditors, the agency said.
S&P said it expects a going concern restructuring scenario to yield stronger recoveries for creditors than liquidation in a default scenario.
Therefore, the recovery analysis assumes a distressed sale of the group as a whole because a liquidation of individual labs could prove challenging given laboratory ownership regulatory constraints in various European jurisdictions, the agency said.
The ratings assume that Synlab group will conduct a consolidation strategy of sourcing and executing low-risk bolt-on acquisitions of laboratories at attractive multiples and extracting synergies, Fitch said.
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