S&P: Smurfit Kappa notes BB+

Standard & Poor’s said it assigned a BB+ rating to the proposed €250 million senior unsecured notes due 2025 to be issued by Smurfit Kappa Acquisitions, a wholly owned subsidiary of Smurfit Kappa Group plc.

The agency also said it assigned a recovery rating of 3 to the proposed senior unsecured notes, indicating 50% to 70% expected default recovery.

The agency also said it affirmed the BB+ rating on the company’s existing senior unsecured notes. The recovery rating is unchanged at 3.

The proceeds will be used to pay down part of the existing €750 million term loan A, S&P said.

The ratings reflect a view of the proposed unsecured notes ranking pari passu with the existing senior unsecured notes and the unsecured bank facilities, which include the term loan A and revolver, the agency said.

The rating is supported by a comprehensive guarantee package, S&P said, and constrained by the lack of security and the fact that any insolvency process would most likely cover multiple jurisdictions.

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