S&P gives KronosNet, loan B+

S&P said it preliminarily gave B+ ratings to KronosNet Topco SL and its planned seven-year €450 million senior secured term loan to be issued through its subsidiary KronosNet CX Bidco 2022 SL. Concurrently, the company plans to secure a €350 million term loan due in five years plus two one-year extension options. The capital structure will also include a €175 million senior secured revolving credit facility maturing in 6.5 years.

KronosNet plans to buy and merge the customer relationship management and business process outsourcing businesses Konecta and Comdata. The deal is expected to close this month.

“We consider the two companies' operations complementary. Konecta holds leading positions in the Spanish, Colombian, Peruvian, and Argentinean markets while Comdata has only minor operations in Spain and Latin America that are struggling. Meanwhile, Comdata will bring a number one position to the group in Italy and number three position in France where Konecta has no operations,” S&P said in a press release. Spain, France and Italy are expected to account for about 67% of the new company’s business.

The agency said it sees KronosNet lowering its debt to EBTIDA below 5x by year-end 2023, helped by higher EBITDA generation and positive free operating cash flow in the next 12 months.

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