S&P ups WorldPay, rates notes BB

Standard & Poor's said it raised to BB its long-term corporate credit rating on Ship Luxco 3 Sarl, a holding company for U.K.-based payments processor WorldPay.

The agency affirmed the short-term corporate credit rating on Ship Luxco 3 at B and subsequently withdrew the ratings, together with all of its issue and recovery ratings on the facilities that have been repaid.

At the same time, S&P assigned a BB long-term corporate credit rating to Worldpay Group plc.

Furthermore, the agency assigned issue ratings of BB to the proposed £600 million equivalent senior unsecured notes maturing 2022 to be issued by Worldpay Finance plc. The recovery rating is 3, indicating an expectation of "meaningful" recovery prospects in the higher half of the 50%-70% range.

The actions follow the completion of Worldpay's IPO on the London Stock Exchange, which successfully raised net proceeds of about £900 million. WorldPay used these proceeds, along with £1.5 billion of new credit facilities, to reduce and refinance the existing capital structure, including the group's payment-in-kind (PIK) loans and preferred equity certificates.

This transaction has led to a marked improvement in WorldPay's credit metrics. The agency now expects WorldPay's pro forma S&P-adjusted leverage to decline to below 5 times in 2015 from 8.6 times in 2014.

Additionally, the refinancing of WorldPay's debt, including the proposed notes, is set to materially reduce WorldPay's cost of debt, supporting its free cash flow generation. S&P therefore revised Worldpay's financial risk profile assessment upward to "aggressive" from "highly leveraged."

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