S&P affirms Selecta on acquisition news

S&P said it affirmed the B long-term corporate credit rating on Selecta Group BV.

The agency also said it affirmed the BB- rating on Selecta's super senior revolving credit facility due in 2019.

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

S&P also said it affirmed the B rating on the €350 million and CHF 245 million senior secured notes due June 2020.

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

The outlook is negative.

The ratings follow news that Selecta intends to acquire Pelican Rouge Group BV, S&P said.

The acquisition is expected to be funded with €180 million additional payment-in-kind (PIK) notes from the group's majority shareholder KKR, the agency said, and €375 million of loan notes to be offered to Pelican Rouge's existing debt holders in conjunction with the proposed transaction.

S&P said it understands that Selecta also is in the process of increasing its revolver by €50 million to €100 million, which should provide Selecta with adequate financial flexibility.

The Pelican Rouge acquisition provides a significant increase in machine density for Selecta in key geographies, the agency said.

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