S&P gives Mercer notes B+

S&P said it assigned its B+ issue-level and 3 recovery ratings to Mercer International Inc.’s planned senior unsecured notes due 2029. The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in default.

Proceeds are expected to be used to redeem senior unsecured notes with maturities in 2024 and 2025. On completion of the refinancing, Mercer’s next material debt maturity will be in 2025. The company’s interest expenses will decline modestly from the comparably lower coupon expected on the new notes, the agency said.

All other ratings on Mercer are unchanged, including S&P’s B+ long-term issuer credit rating. “The planned refinancing is leverage neutral, and our estimates for the company’s prospective credit ratios have not materially changed,” S&P said in a press release.

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