S&P downgrades Findus

Standard & Poor’s said it lowered the corporate credit rating on Lion/Gem Luxembourg 3, an intermediate holding company for Findus, to CCC+ from B- and removed the rating from CreditWatch negative where it was placed in August.

The outlook is stable.

The agency also said it raised the rating on the company’s subordinated payment-in-kind toggle notes to CCC+ from CCC, bringing them in line with the corporate credit rating.

This reflects a decision to raise the recovery ratings in this instrument to 4 from 6.

The recovery rating of 4 indicates 30% to 50% expected default recovery.

The agency also said it removed the rating from CreditWatch negative.

Finally, S&P said it withdrew the recovery rating on its B- senior secured notes as they are being redeemed.

Following the disposal of business assets and the repayment of senior secured notes, the company’s debt capital structure will contain very little cash-paying debt, primarily in the form of the newly arranged £35 million revolving credit facility, the agency said.

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