Moody’s ups Zinc Capital notes, affirms Befesa

Moody's Investors Service said it affirmed Triton III No. 14 Sarl's (holding company for Befesa Medio Ambiente Group, BMA) B3 corporate family rating and B3-PD probability of default rating.

Concurrently, the agency raised the group's senior secured notes rating, with the instrument being issued by finance vehicle Zinc Capital SA, to B2 from B3 and affirmed the Caa2 rating on the senior subordinate PIK-toggle note issued by finance vehicle Bilbao (Luxembourg) SA.

The outlooks remain stable.

Moody’s said the upgrade of the €300 million senior secured notes reflect its view that liquidity within the ring-fenced Befesa Zinc group is better than initially expected with cash and equivalents as of September 2014 at around €37 million. This represents about 15% of divisional sales, a level that the agency deems solid also when considering sizeable intra-year working capital swings.

The rating level one notch above the group's corporate family rating reflects the material amount of subordinated debt within the Befesa Medio Ambiente group, pertaining to €150 million PIK-toggle notes and a €48 million vendor note that provide first-loss cushion.

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