S&P changes Alliance Automotive to negative

Standard & Poor's said it revised its outlook on Alliance Automotive Holding Ltd. to negative from stable and affirmed the B+ long-term corporate credit rating.

At the same time, the agency affirmed its B+ issue rating on the instruments issued by subsidiary Alliance Automotive Finance plc, namely the existing €225 million fixed-rate notes, the amount of which could be increased by about €50 million, and the €100 million floating-rate notes. The recovery rating on these instruments is 4, indicating an expectation of average recovery in the event of a payment default, in the lower half of the 30%-50% range.

In addition, S&P affirmed its BB issue rating on the €50 million super senior revolving credit facility issued by Alliance Automotive Investment Ltd. The recovery rating on this facility is 1, indicating an expectation of very high recovery in the event of a payment default, in the range of 90%-100%.

Alliance Automotive intends to increase the size of its existing €225 million fixed-rate notes by about €50 million. It will use the proceeds for general corporate purposes, notably acquisitions, refinance €16 million drawn under the revolver and pay €2 million of transaction costs.

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