S&P might lower Azelis, loans

Standard & Poor's said it placed its B long-term corporate credit rating on Azelis Finance SA, the parent holding company of chemical distributor Azelis, on CreditWatch with negative implications.

The agency also placed its B issue ratings on the €180 million first-lien term loan and €40 million revolving credit facility, and its CCC+ issue rating on the €60 million second-lien term loan, on CreditWatch negative. The recovery ratings on these facilities are unchanged at 4 and 6, respectively.

S&P said the CreditWatch placement follows Azelis' announcement that it intends to acquire Koda Distribution Group. The agency recognizes that the acquisition could significantly enlarge the scale and scope of Azelis and bring important client and supplier synergies.

At the same time, S&P said it considers that there is a risk of releveraging beyond S&P-adjusted debt to EBITDA of 5 times to 6.5 times and funds from operations interest coverage of about 3 times, which the agency views as commensurate with a B rating.

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