S&P turns Aenova view to positive

S&P said it changed Aenova Holding GmbH’s outlook to positive from stable and affirmed the B- ratings on the company and its first-lien term loan.

“The group reported consistently high cost pass-through in 2019 and 2020 and was able to realize significant direct cost savings--raw and packaging materials--and indirect savings. We expect the S&P Global Ratings-adjusted EBITDA margin to gradually improve to about 14%-15% over the next two years, from about 13.5% in 2020, as the group continues to focus on optimization of procurement and profitable growth from new business wins with higher-margin prospects. In addition, we estimate adjusted debt to EBITDA to improve to about 6x-6.5x and funds from operations (FFO) interest coverage above 3x in 2021,” S&P said in a press release.

Aenova also plans to refinance its second-lien payment in kind loan with an incremental first-lien term loan issuance of €125 million (upsized to €565 million from €440 million). In addition, the group will seek to extend the maturity of the first-lien term loan facility by a year to March 2026 from March 2025.

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