S&P changes AI Alabama to stable

S&P said it revised the outlook on AI Alabama Midco BA, the holding company Of Ammeraal Beltech, to stable from negative, and affirmed its B long-term corporate credit rating.

At the same time, the agency affirmed the B issue ratings on the €290 million first-lien term loan B and €40 million revolving credit facility taken by AI Alabama BV. The recovery ratings remain at 3, indicating an expectation of meaningful recovery in the 50%-70% range (rounded estimate: 55%) in the event of a default.

S&P also affirmed the CCC+ issue rating on the €60 million second-lien loan. The recovery rating remains 6, indicating expectations of negligible recovery of 0%-10% (rounded estimate: 0%) in a default scenario.

S&P said the outlook revision follows Ammeraal Beltech's completion of its cost-efficiency program and relatively strong revenue growth in the first four months of 2017.

“Our adjusted EBITDA figure has been negatively affected by material restructuring costs in 2016. These costs amounted to about €12 million in 2016, which was somewhat higher than we expected, resulting in subdued margins,” the agency said in a news release.

“We understand that the company has now fully implemented its cost-efficiency program and we do not expect any further material restructuring.

“We expect that this, together with cost savings, should lead to an improvement in margins and credit ratios over the coming year,” S&P added in the release.

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