S&P rates Kirk Beauty instruments B-, CCC

S&P said it gave preliminary B- ratings to Kirk Beauty One GmbH’s planned €1.08 billion term loan, €1 billion of senior secured notes and €170 million revolving credit facility. The agency also rated Kirk’s expected €300 million of senior subordinated payment-in-kind notes CCC.

Concurrently, S&P placed Kirk’s CCC+ issuer rating on CreditWatch with positive implications.

The company will use the proceeds to redeem its drawn €135 million revolver due February 2022, the €300 million senior secured notes due July 2022, the €1.67 billion senior secured term loan due August 2022, and the €335 million senior unsecured debt due July 2023.

The repayment would eliminate Kirk Beauty's short-term refinancing risk, which with the pandemic helped drive the downgrade to CCC+ in April, S&P said.

At the closing of the transaction, the company expects to have €192 million cash on the balance sheet and the fully undrawn revolver, supporting its liquidity position.

“The CreditWatch placement indicates the potential for an upgrade by one notch to B-, albeit with an expected negative outlook if the refinancing is successful and on terms that are largely commensurate with our base case,” the agency said in a press release.

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