S&P gives Synthos, notes BB

S&P said it gave BB ratings to Synthos SA and its planned €500 million of senior secured notes.

After a punishing pandemic-related hit to performance in second-quarter 2020, Synthos swiftly recovered in the second half and into 2021, reflected in S&P Global Ratings-adjusted EBITDA of about Polish zloty (PLN) 830 million for the 12 months to March 31, 2021, more than 25% compared with full-year 2020, the agency said.

Synthos agreed to acquire Trinseo SA's synthetic rubber business for an enterprise value of about $480 million. The company plans to upsize its revolver by €150 million to €500 million and amend it to come due in 2028. It will use the note proceeds and a drawdown from the revolver to fund the acquisition.

The outlook is stable. “The stable outlook reflects our view that current positive business trends should facilitate deleveraging in 2021, with continuously solid free operating cash flow (FOCF) and balanced investment spending and dividends leading to adjusted debt to EBITDA below 3x beyond 2021 under normalized market conditions,” the agency said in a press release.

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