S&P affirms Bilbao (Luxembourg), Befesa

S&P said it affirmed the B long-term corporate credit ratings on Bilbao (Luxembourg) SA, the parent holding company of Befesa Medio Ambiente, and its main operating subsidiary Befesa Zinc SAU.

The outlook is positive.

In addition, the agency affirmed the B issue-level rating on Befesa's €300 million senior secured notes issued by special-purpose vehicle Zinc Capital SA. The recovery rating is 3, indicating an expectation of meaningful recovery (50%-70%; rounded estimate: 65%) recovery prospects.

S&P also affirmed the CCC+ issue-level rating on Bilbao's €162 million payment-in-kind toggle notes. The recovery rating is 6, indicating an expectation of negligible (0%-10%) recovery for creditors in the event of a payment default.

The agency said the affirmation is based on its expectation that the group will continue delivering strong results and generating positive free operating cash flow in the next two to three years based on increasing throughput volumes and supportive zinc prices.

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