S&P: Kerneos on positive watch

S&P said it placed the B+ long-term corporate credit rating on Kerneos Corporate SAS on CreditWatch with positive implications.

The agency also said it placed the B+ ratings on the group's €200 million 5¾% senior secured fixed-rate notes and €175 million floating-rate notes due 2021 on CreditWatch with positive implications.

S&P also said it withdrew the B+ rating and 3 recovery rating on the group's proposed €445 million floating-rate term loan, which Kerneos no longer intends to place.

The CreditWatch placement follows news that Imerys plans to acquire Kerneos for €880 million from its current private equity owner Astorg Partners SAS, the agency explained.

The closing of the transaction is subject to consultation with Kerneos' workers council and regulatory authorities, S&P said, and is expected to occur in mid-2017.

Kerneos discontinued the refinancing of its €200 million 5¾% senior secured fixed-rate notes and €175 million floating-rate notes and these will likely be redeemed on or about the closing date of the acquisition with the funds provided by Imerys, the agency said.

Imerys group's operational performance benefits from significant diversification and vertical integration into mining, providing profitability resilience despite cyclical end-market exposure, S&P said.

Moderate leverage and strong recurring free cash flows support the company's intermediate financial risk profile, though the debt-funded acquisition will lead to a slight deterioration in metrics for 2017, the agency said.

© 2015 Prospect News.
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