S&P puts HRG Group on positive watch

S&P said it placed all of its ratings on HRG Group Inc., including the B corporate credit, BB- senior secured and B senior unsecured ratings, on CreditWatch with positive implications.

“The CreditWatch placement reflects our view that HRG will use the majority of net cash proceeds from the pending [Fidelity & Guaranty Life] FGL sale to repay a meaningful portion of its approximately $1.8 billion total holding company debt. It is also our view that HRG will subsequently use a portion of its stake in Spectrum Brands (presently worth about $3.6 billion) to repay all remaining holding company debt, with the residual value accruing primarily to shareholders,” S&P said in a news release.

“We believe all remaining holding company debt will be repaid regardless of the outcome of HRG's strategic evaluation, which could include the sale of Spectrum Brands or a distribution of Spectrum Brands shares to HRG shareholders (in conjunction with structuring the holding company debt repayment).”

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