S&P gives BB to Grupo KUO notes

S&P said it assigned a BB issue-level rating on Grupo KUO SAB de CV's (BB/stable/--) proposed $350 million senior unsecured notes due 2027.

The agency also assigned a recovery rating of 3 to the notes, indicating an expectation for a meaningful (50% to 70%) recovery in the event of a payment default.

S&P said it views the transaction as debt-neutral because Grupo KUO will use the proceeds to repay its existing $325 million senior unsecured notes due 2022, any fees in connection with the new issuance and the tender offer of the outstanding notes, as well as to repay some other outstanding debt.

The agency also believes the proposed transaction will improve Grupo KUO's debt maturity profile and support the company's liquidity.

The issue-level rating on the company's proposed senior unsecured notes is BB, the same as the corporate credit rating. The notes will be guaranteed by Grupo KUO's most important subsidiaries, which account for around 98% of the company's EBITDA.

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