S&P cuts Wepa

S&P said it trimmed its ratings to B+ from BB- on Wepa Hygieneprodukte GmbH and its €200 million of floating- and €400 million of fixed-rate notes due 2026 and 2027, respectively.

“Our downgrade of Wepa reflects credit metrics deterioration due to persisting high cost inflation. We estimate Wepa's adjusted leverage will increase to the range of 7.5x-8x at the end of 2021, from about 4x last year, and remain in the 5x-6x range in 2022, a level which we deem is not commensurate with a BB- rating. This is a material deviation compared with our previous estimate of leverage ranging between 5.5x and 6.0x in 2021,” S&P said in a press release.

The agency also noted that Wepa reported third-quarter results and fourth-quarter guidance below its expectations; however, this is mostly due to higher raw material and energy costs.

The outlook is stable.

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