S&P rates Darling notes BB+

Standard & Poor’s said it affirmed the BB+ corporate credit rating on Darling Ingredients Inc.

The agency also said it assigned a BB+ rating on company’s proposed €515 million senior unsecured notes due 2022 issued by Darling Global Finance BV with a recovery rating of 3, reflecting 50% to 70% expected default recovery.

The agency also said it revised the recovery rating on the 5 3/8% senior unsecured notes due 2022 to 3 from 4, reflecting 50% to 70% expected default recovery.

The proceeds will be used by the company to repay its €600 million term loan.

S&P also said it raised the ratings on Darling’s senior secured credit facilities, including the $1 billion revolving credit facility, $200 million term loan A and $600 million term loan B to BBB from BBB-.

The agency also said it revised the recovery rating to 1 from 2, reflecting 90% to 100% expected default recovery.

S&P said it will withdraw ratings on the €600 million term loan upon completion of the refinancing transaction.

The outlook is stable.

The ratings reflect a belief that the company is committed to improving its cash flow ratios despite a delay in leverage reduction because of a combination of lower revenues and foreign currency headwinds, S&P said.

Darling benefits from its global leadership in rendering animal byproducts, albeit in a fragmented industry, including improved geographic diversification as a result of recent acquisitions, the agency said.

Still, the company is exposed to commodity-price volatility, S&P said.

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