S&P: Lecta on positive watch

S&P said it placed the B long-term corporate credit rating on Lecta SA on CreditWatch with positive implications.

The agency also said it affirmed the company's B short-term corporate credit rating.

The positive watch placement follows news that Lecta intends to raise €315 million from the sale of new shares on the Madrid, Barcelona, Bilbao and Valencia stock exchanges, S&P said.

Apart from €40 million of fees and expenses, the company plans to use €275 million of expected proceeds to redeem part of its outstanding €600 million notes, the agency said.

S&P said it views this as credit positive because it would materially lower Lecta's leverage and improve its cash flow generation through lower interest payments, effectively enabling a further positive transformation of its business portfolio.

If the IPO is executed as planned, the agency said it estimates that Lecta's credit metrics would strengthen materially.

The CreditWatch will be resolved within three months or once Lecta has completed its IPO later this year, S&P said.

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