S&P affirms Sarens on tap issue

S&P said it affirmed the long-term corporate credit rating on Sarens Bestuur NV at BB-.

The agency also said it affirmed the BB- rating on the company’s €125 million senior unsecured notes and proposed €125 million tap issued by Sarens Finance Co. NV.

The recovery rating on this debt instrument is unchanged at 3, indicating 50% to 70% expected default recovery.

Sarens is tapping its existing €125 million subordinated notes for an additional €125 million, which should result in a total quantum of these notes of €250 million, S&P explained.

The proceeds will be used to repay the company's €45.7 million subordinated “de groof” bond due in December 2016, the agency said, and repay current drawings under the company's global leasing facilities and bilateral lines, including its revolver.

The net effect on Saren's adjusted debt is minimal, S&P said, but the transaction should offer the company greater headroom and flexibility under its global debt facilities going forward.

This should support the build out of the sizable contract with Chevron, which will ramp up through 2017, the agency added.

Sarens also continues to experience challenging trading conditions and project delays in some of its end markets, specifically the oil and gas and commodity industries, S&P said.

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