S&P affirms Marcolin, gives notes B-

S&P Global Ratings affirmed its B- long-term issuer credit rating on Marcolin SpA and assigned its B- issue rating and 4 recovery rating to €350 million of proposed notes.

The outlook is negative.

The company, as background, is planning to refinance its existing capital structure with the proposed issuance of €350 million senior secured notes maturing 2026 and €46 million super senior committed lines, expected to remain undrawn post-closing.

The negative outlook reflects the view of limited rating headroom in case of negative deviation from S&P’s current base case, due to the high leverage post-refinancing and uncertainty around the recovery of operating performance.

The company reported material disruption in its operating performance during 2020 due to the Covid-19 pandemic, and S&P expects a gradual recovery in revenue and EBITDA to pre-pandemic levels by year-end 2022, with leverage approaching 11x in 2021 and reducing close to 7.5x-8.0x by 2022.

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