S&P lifts JAB view to stable, rates bond BBB+

S&P said it revised to stable from negative the outlook on JAB Holding Co. Sarl.

The agency also said it affirmed the company’s corporate credit rating at BBB+.

S&P also said it affirmed the BBB+ ratings on the group’s senior unsecured bonds of €750 million in two tranches and €600 million, all issued by JAB Holdings BV and guaranteed by JAB.

The three bonds are due in 2021, 2022 and 2025, respectively.

The agency also said it assigned a BBB+ rating to the proposed benchmark-sized bond to be issued by JAB Holdings BV and guaranteed by JAB.

The outlook revision follows the successive share divestments in JAB’s core asset Reckitt Benckiser, which yielded £1.2 billion to partially fund JAB’s ultimate $3.5 billion equity infusion in the private $14 billion transaction to take over the coffee company Keurig Green Mountain, S&P said.

On the closing of the Keurig acquisition, JAB eroded part of its financial flexibility, the agency explained.

The recently announced $1.35 billion transaction on Krispy Kreme also is expected to have limited impact on the portfolio’s key components. This is because the ultimate cash injection from JAB is unlikely to exceed $200 million, which represents less than 1% of the company’s portfolio market value as of March 31, 2016.

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