S&P revises Galapagos notes recovery

S&P said it reviewed the recovery and issue-level ratings for Galapagos Holding SA that were considered under criteria observation after the agency published revised recovery ratings criteria Dec. 7.

With the criteria review complete, S&P said it revised the recovery rating on the senior secured notes to 3 from 4 and affirmed all of the issue-level ratings.

These rating actions stem solely from the application of the revised recovery criteria and do not reflect any change in the assessment of the corporate credit ratings for issuers of the affected debt issues.

As a result of the review, S&P said it revised to 3 from 4 the recovery rating on the group's €525 million senior secured notes due 2021 and affirmed the B- rating on these notes.

The recovery rating indicates 50% to 70% expected default recovery.

The recovery rating has improved because it no longer considers pension deficit and finance leases as prior-ranking liabilities as they are not deemed material compared with the total debt claims, the agency said.

S&P also said it affirmed the B+ rating and left unchanged the 1 recovery rating on the €75 million super senior revolving credit facility and the €400 million super senior bonding facility, supported by their super senior position in the waterfall and the absence of significant prior-ranking liabilities.

The recovery rating of 1 indicates 90% to 100% expected default recovery.

The agency also said it affirmed the CCC rating and left unchanged the 6 recovery rating on the group's €250 million senior unsecured notes. The recovery rating of 6 indicates 0 to 10% expected default recovery.

The ratings reflect the group’s solid market positions, good reputation and strong customer relationships, S&P said.

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