S&P changes WFS Global to stable

S&P said it revised the outlook on WFS Global Holding SAS to stable from negative and affirmed its B- long-term corporate credit rating.

At the same time, the agency affirmed the B- issue rating on the company's €375 million senior secured notes (including the recent tap issuance of €50 million) due 2022. The recovery rating is 3, reflecting an expectation that recovery in the event of a payment default will be about 65%. It also affirmed the CCC issue rating on the €140 million senior unsecured notes due 2022. The recovery rating is 6, reflecting an expectation of 0% recovery in the event of a payment default.

WFS Global tapped its existing senior secured notes for €50 million and enlarged its existing revolving credit facility due in 2020 by €10 million to €95 million. This significantly increased its liquidity sources.

Proceeds from most recent tap are to be used to materially reduce the cash drawings under the company’s rolling credit facility.

In the agency’s view, liquidity remains less than adequate, mainly because headroom under the revolver is tight. That said, the company's adjusted EBITDA performance has improved compared with the previous year and S&P said it considers that this has helped reduce the risk of a covenant breach.

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