S&P rates Sanitec notes B+

Standard & Poor's said it assigned a B+ long-term credit rating to Sanitec Oyj, along with a B+ rating to its proposed €250 million senior secured floating-rate notes due in 2018.

The agency also said it assigned a recovery rating of 3, indicating 50% to 70% expected default recovery.

The outlook is stable.

The actions follow news that Sanitec plans to refinance its existing debt facilities. These plans include the issue of €250 million senior secured floating-rate notes due in 2018 and using its cash balance to repay existing outstanding debt.

The ratings reflect the group's aggressive financial risk profile given its private equity ownership, S&P said.

Sanitec's fair business risk profile is based on a view of the group's exposure to cyclical construction markets, the agency said, as well as its limited scale and diversity and weak profitability compared with some of its larger peers.

These factors are partially offset by the group's leading market positions in Northern and Central European markets, its branded product portfolio and its meaningful exposure to the less cyclical renovation segment, S&P said.

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