S&P revises JAB Holding

S&P said it revised the outlook on JAB Holding Co. Sarl to negative from positive and affirmed the A- ratings on the company and the debt sold by JAB Holdings BV.

“JAB announced it will unwind the Cottage SPV by repaying the $1.78 billion used to finance the partial tender offer for Coty in early 2019. The repayment of the loan with JAB's own liquidity marks the end of another failed attempt to revive Coty's equity and credit story. The planned loan repayment brings JAB's LTV above 20% from 16% at year-end 2019, which is above our current threshold for the A- rating,” said S&P in a press release.

“The negative outlook reflects the risk of a downgrade if we estimate that JAB is unable to reduce its LTV well below our 20% threshold by year-end 2020, for example, due to weaker performance at its businesses following the recent material downward revision of our economic forecasts for the U.S. and Europe,” the agency said.

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