S&P cuts Eco-Bat to negative

Standard & Poor's said it revised its outlook on Eco-Bat Technologies Ltd. to negative from stable following the announcement by intermediate parent holding company EB Holdings Inc., which owns 86.5% of Eco-Bat's shares, that it intends to issue a €600 million payment-in-kind loan due 2017 to refinance existing notes of €250 million and to fund a distribution to shareholders.

S&P also said it affirmed its B+ long-term corporate credit rating, along with its B senior unsecured debt rating on the €235 million 10.125% bonds due 2013 issued by related entity, Eco-Bat Finance plc and guaranteed by Eco-Bat.

The agency noted that it recognizes that the proposed issuance is a shareholder driven, rather than management driven, event. Nevertheless, the proposed PIK loan represents sizable additional debt that might need to be refinanced or repaid in future by Eco-Bat. For the purpose of our financial ratios, S&P said it treats the proposed loan as debt. Interest will not be paid in cash but will accrue over time.

At the company's request, S&P said it withdrew its B+ long-term corporate credit rating on EB Holdings and the B- senior unsecured debt rating on EB Holdings' existing €250 million 10% callable notes due 2015. The proposed €600 million PIK loan due 2017 will be unrated.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.