S&P downgrades Selecta

S&P said that it lowered the long-term corporate credit rating on Selecta Group BV to B from B+ and placed the rating on CreditWatch with negative implications.

The agency also said it lowered to BB- from BB the rating on Selecta's super senior revolving credit facility due in 2019 and placed it on CreditWatch with negative implications.

The recovery rating on this facility is 1, indicating 90% to 100% expected default recovery.

S&P also said it lowered the rating on the €350 million and CHF 245 million senior secured notes due June 2020 to B from B+ and placed the rating on CreditWatch with negative implications.

The recovery rating on the notes is 3, indicating 50% to 70% expected default recovery.

The downgrades reflect Selecta's weaker-than-expected full-year results for financial year 2015 and results for the first half of financial-year 2016, the agency said.

Selecta has faced ongoing operational difficulties in the vending operator and office coffee supply fields, S&P explained.

Lower EBITDA margins combined with material maintenance capital expenditure needs also put pressure on the company's cash-flow generation, the agency said.

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