Moody’s revises Swissport to developing

Moody's Investors Service said it affirmed Swissport Group Sarl’s B3 corporate family rating and B3-PD probability of default rating.

The agency also affirmed the B1 rating of the €660 million term loan B, the B1 rating of the €400 million senior secured notes and the Caa1 rating of the €290 million senior unsecured notes issued by Swissport Investments SA. It also affirmed the B1 rating of the CHF 150 million revolving credit facility issued by Swissport International AG.

Concurrently, Moody's changed the outlook on the ratings to developing from stable.

Moody’s said the outlook change follows the company’s May 3 announcement of a technical breach of covenant in the term loan B/revolver credit facility agreement. The covenant breach emerged as part of a process by HNA Group to inject a large amount of equity into Swissport in excess of €700 million. Moody's understands that the two events are unrelated and that the covenant breach preceded the equity injection.

"While we consider the equity injection to be credit positive if used to improve the company's capital structure, we do not have sufficient visibility at this point in time on the use of the cash proceeds, as well as on the outcome of the debt restructuring that will likely be necessary to cure the covenant default," Emmanuel Savoye, Moody's assistant vice president and lead analyst for Swissport, said in a news release.

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