Fitch: Labco on positive watch

Fitch Ratings said it placed Labco SA’s issuer default rating of B+ on Rating Watch negative and removed the Rating Watch positive on the senior secured notes following news of its buy-out by Cinven after the cancellation of its planned initial public offering.

The agency also said it affirmed the BB rating with RR2 recovery rating on Labco’s super senior secured revolving credit facility and the BB- with RR3 recovery rating on its senior secured notes.

Fitch said it views the rating as under pressure following the cancellation of the initial public offering initiative – given that proceeds were intended to reduce debt, leaving Labco’s rating headroom low.

The negative watch reflects assumptions that after the buy-out, the new capital structure will not include any equity proceeds or debt reduction, the agency said.

De-leveraging prospects also are constrained by Labco’s reliance on successfully integrating bolt-on acquisitions, which are assumed will remain partly funded by debt post the buy-out, Fitch said.

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