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S&P ups Sunrise; rates loans, notes BB+
Standard & Poor's said it raised the corporate credit rating on Sunrise Communications Holdings SA to BB+ from B+.
The outlook is stable.
The agency also raised its issue ratings on the senior secured notes to BB+ from BB- and lowered the recovery rating to 3 from 2.
In addition, S&P upgraded the subordinated notes to BB- from B- and maintained the recovery ratings on these notes at 6.
S&P expects that these existing senior secured and unsecured debt facilities will be paid down in full, at which time it will withdraw these ratings.
All corporate credit ratings and issue ratings were removed from CreditWatch, where they were placed with positive implications on Jan. 20.
Furthermore, the agency assigned its BB+ issue ratings and 3 recovery ratings to Sunrise's proposed new secured term loan facilities, revolving credit facilities and senior secured notes.
The upgrade follows Sunrise's successful listing on the SIX Swiss Exchange. Sunrise raised CHF 1.36 billion of primary proceeds (excluding transaction costs) in its recent equity issuance, which it will use for debt reduction – including the PIK toggle notes at Mobile Challenger Group, in addition to CHF 600 million (excluding over-allotment option) of secondary proceeds for selling shareholders. As part of this transaction, the company is in the process of refinancing all existing debt with new senior secured bank loans and notes.
S&P forecasts that the transaction will reduce Sunrise's adjusted leverage to about 3.2 times in 2015 and increase its EBITDA cash interest coverage to about 10 times to 11 times, pro forma the full year benefit under the new debt structure.
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