S&P cuts Kleopatra 2

S&P said it lowered Kleopatra Holdings 2 SCA’s issuer rating to B- from B and its senior secured facilities and senior subordinated notes to B- and CCC, respectively.

S&P had forecasted S&P Global Ratings-adjusted EBITDA of €250 million-€270 million but KH2 generated only about €233 million. Better than 2021’s about €210 million in 2021 but far short of the forecast, the agency said.

For this year, “We anticipate positive but minimal S&P Global Ratings-adjusted FOCF for 2023. Our forecasts include S&P Global Ratings-adjusted EBITDA of €245 million, cash interest and tax outflows of about €175 million, and capital expenditure (capex) of about €85 million. We expect this will result in S&P Global Ratings-adjusted FOCF of about €25 million, assuming some working capital inflows amid our forecast of declining resin prices,” the agency said in a press release.

The outlook is stable.

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