S&P rates Kloeckner Pentaplast loan B, notes CCC+

S&P said it affirmed its B long-term corporate credit rating on Kleopatra Holdings 2 SCA – the parent of Germany-based plastic packaging manufacturer Kloeckner Pentaplast – and on Kleopatra Holdings 1 SCA – the ultimate holding company.

S&P also removed the ratings from CreditWatch developing where S&P placed them on April 18. The outlook is stable.

At the same time, S&P assigned a B issue-level rating and 4 recovery rating to the proposed first-lien senior secured term loan and a CCC+ issue rating and 6 recovery rating to the proposed €385 million holdco notes.

S&P also assigned a B long-term corporate credit rating to Kloeckner Pentaplast of America Inc., the issuer of the term loan and an operating subsidiary of KP.

The agency also affirmed its B issue ratings on the existing senior secured notes.

“The affirmation reflects our view that the group plans to issue new €1.6 billion equivalent first-lien term loans (split between euro and U.S. dollar tranches) and €385 million holdco notes to refinance its existing debt – including the existing senior secured term loans of about €970 million and €300 million senior secured notes – and to distribute dividends of about €425 million. The group will also use the proceeds to fund the acquisition of U.K.-based Linpac Group, which will result in relatively higher leverage, albeit still in line with our expectations for the current rating,” S&P said in a news release.

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