S&P rates Swissport bonds B

Standard & Poor's said it assigned a preliminary B long-term corporate credit rating to Swissport International Ltd. and Aguila 3 SA, a holding company created for the purpose of acquiring Swissport.

In addition, S&P assigned a preliminary B rating to Swissport's proposed CHF 750 million-equivalent senior secured notes, to be issued by Aguila 3 SA. The preliminary recovery rating is 4, reflecting expectation of 30% to 50% recovery.

The outlook is stable.

Proceeds of the notes, along with about CHF 450 million of funds from the new owners, PAI Partners, will be used to finance the acquisition of Swissport from Ferrovial SA as well as refinance existing debt.

"The preliminary rating on Swissport reflects our view of the group's high leverage post the transaction, with Standard & Poor's-adjusted total debt of around CHF 1.2 billion. It also reflects the group's exposure to the highly cyclical and competitive airline industry, with local competitors that tend to be well entrenched," S&P analyst Andrew Stillman said in a statement.

"These risks are partially mitigated by Swissport's leading market position in providing airport services; the resilience of the group's profitability in recent years; its geographically diverse portfolio of airports served; and well diversified customer base. Further support for the rating comes from Swissport's good revenue visibility, provided by stable medium-term contracts with airline customers."

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