S&P rates Novalis notes BB

Standard & Poor’s said it affirmed the BB long-term corporate credit rating on ELIS SA.

The agency also said it assigned BB ratings and 3 recovery ratings to Novalis SAS’s proposed €800 million senior secured notes.

The 3 recovery rating reflects recovery expectations in the higher half of the 50% to 70% range, S&P said.

The agency also said it withdrew the BB ratings on Novalis’s €450 million senior secured notes due 2018, and affirmed the BB ratings on the group’s €850 million bank instruments due February 2020, consisting of the revolving credit facility and the senior term loan.

The outlook is stable.

The ratings reflect a view that overall leverage will remain broadly unchanged after the refinancing transaction, S&P said.

The company is engaging in the transaction to reduce its interest costs by refinancing its legacy pre-initial public offering debt with debt at a lower interest rate, the agency said.

As such, total outstanding debt will not change materially, S&P added.

While Elis’s business is largely concentrated in the French market from which it derives about 72% of revenue, the recent acquisition of Brazilian entities has increased its diversification, the agency said.

The company operates in a fragmented and competitive industry and focuses on Western European markets, where economic conditions are expected to remain sluggish this year, the agency said.

This is mitigated by the company’s leading positions in its key operating segments, S&&P said.

© 2015 Prospect News.
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