S&P gives B+ to Action loan

S&P said it affirmed its B+ long-term corporate credit rating on Peer Holding III BV, the parent of Netherlands-based value retailer Action. The outlook is stable.

At the same time, S&P assigned a B+ issue rating and 4 recovery rating to the new €2.285 billion senior secured term loan B due in 2025 and €125 million senior secured revolving credit facility. The 4 recovery rating indicates an expectation of average (30%-50%; rounded estimate: 45%) recovery prospects in the event of default.

S&P said it also affirmed the B+ issue ratings on the existing €1.6 billion senior secured term loan and €75 million senior secured revolver. The recovery rating on these instruments is unchanged at 3, reflecting an expectation of meaningful (50%-70%; rounded estimate 60%) recovery prospects in the event of default.

“The affirmation reflects our view that Action's continued execution of its profitable expansion strategy should allow the group to generate sufficient earnings and cash flows to sustain the increased debt amount after the transaction,” S&P said in a news release.

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