Fitch rates Kernel bond BB-

Fitch Ratings said it assigned Kernel Holding SA's planned $300 million-$350 million bond an expected senior unsecured rating of BB- with a recovery rating of RR4 (50%).

The planned bond's BB- rating is in line with the outstanding senior unsecured bonds', Fitch said. The notes will be guaranteed on a senior basis by the group's major operating subsidiaries, which represent 96.8% of the group EBITDA.

“By extending the debt maturity profile, the new bond placement will ensure sufficiently strong hard-currency debt service ratio of above 1.5x over the next 12 to 18 months, underpinning Kernel's BB- long-term foreign-currency issuer default rating,” Fitch said in a press release.

Fitch said it expects the proceeds to be used to strengthen the Kernel’s liquidity and prepay part of the $500 million eurobond maturing in January 2022, and not for added capital expenditures or mergers and acquisitions.

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