S&P rates Guala Closures notes B+

S&P said it rated Guala Closures SpA’s planned €475 million of senior secured notes due 2028 B+. The agency also affirmed Guala’s B+ issuer rating and removed it from CreditWatch, where it was placed with negative implications on Feb. 11.

The affirmation and removal from the CreditWatch follow Investindustrial completing its tender offer for Guala. It now owns a 94.9% stake.

“We forecast that Guala Closures' credit metrics will continue to support the current rating level, despite the change in ownership. We expect adjusted debt to EBITDA will marginally reduce to about 5x at end-2022 from 5.2x at end-2021 as EBITDA generation improves, supported by the recovery of the luxury products segment and additional contribution from new products. We expect funds from operations (FFO) to debt will increase to 13.5%-14% at end-2022 from about 12% at end-2021 due to EBITDA growth and a slight decrease in cash taxes compared to 2021,” the agency said in a press release.

Guala will use the new notes’s proceeds and cash on hand to repay its €455 million of notes due 2024, €17 million of drawdown under its revolver and cover transaction costs. The company plans to raise a new €80 million super senior revolver to enhance its liquidity profile.

The outlook is stable.

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