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S&P rates Grainger notes BBB-
S&P said it affirmed the BB long-term issuer credit rating on Grainger plc.
The outlook remains positive.
The agency also said it assigned a BBB- rating to Grainger's proposed secured notes and affirmed the BBB- rating on Grainger's existing senior secured notes, which will be repaid by the proceeds of the new notes.
The recovery rating on the existing and new notes is 1, indicating 90% to 100% expected default recovery.
The affirmations follow news that Grainger will issue an eight- to 10-year £300 million to £325 million senior secured bond, S&P explained.
The agency said it understands that management will repay its existing £275 million senior secured bond with the proceeds of the new bond issue.
Grainger's cost of debt is expected to improve further as a result of the transaction, S&P said.
Its adjusted EBITDA-to-interest ratio will improve toward 3.2x to 3.3x in the next two years, the agency added.
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