S&P corrects, ups Coty facilities

S&P said it corrected its ratings on Coty Inc. subsidiary Coty BV’s euro-denominated senior secured credit facilities.

They agency raised the rating on Coty BV's €325 million incremental term B due 2022 and €140 million incremental term A due 2020 to BBB- from BB+ and revised the recovery rating to 1 from 2, reflecting expectations of very high (90%-100%; rounded estimate: 95%) recovery in the event of default.

Because Coty Inc. is a co-borrower, S&P previously treated the add-on term loans as if they were on equal footing with the rest of the secured debt. The agency revised the analysis to reflect the debt structure and assigned roughly 15% of the consolidated cash flows from Coty Inc. to Coty BV.

The rating on the Coty Inc. and Galleria Co. credit facilities remains BB+, and the recovery rating remains unchanged at 2, reflecting an expectation for substantial (70%-90%; rounded estimate 75%) recovery.

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