S&P rates Ovako notes B

Standard & Poor's said it assigned a preliminary B corporate credit rating to Ovako Group AB.

The agency also said it assigned a preliminary B rating to the company's proposed €285 million senior secured notes with a preliminary recovery rating of 4, indicating 30% to 50% expected default recovery.

The outlook is stable.

The preliminary rating is based on the company's plan to refinance its outstanding debt over the next few months with €285 million five-year senior secured notes.

It also factors in that the company will sign a €40 million medium-term revolving credit facility and that headroom under the financial covenants and permitted indebtedness baskets will enable the company to fund future working capital fluctuations.

The rating also reflects Ovako's weak business risk profile and highly leveraged financial risk profile, the agency said.

The ratings also consider the company's financial sponsor ownership and volatile profits and credit metrics, S&P added.

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