S&P rates new Xella loans B+

S&P said it affirmed the B+ long-term corporate credit rating on Xella International SA, the parent company of Xella.

The agency also said it assigned a preliminary B+ long-term corporate credit rating to LSF10 XL Investments Sarl, along with the same rating to LSF10 XL Bidco SCA, the issuer of the group's proposed new debt.

The outlook is stable.

S&P also said it affirmed the B+ rating on the group's existing facilities issued by special-purpose vehicle Xefin Lux Sarl.

The proceeds of the bond were on-lent to Xella as a term loan under facility D2, the terms of which are back-to-back with those of the notes.

The rating on facility D2 is B+ and the recovery rating is 3. The loan ranks pari passu with Xella's other senior secured facilities, including the €235 million facility G. The 3 recovery rating indicates 50% to 70% expected default recovery.

S&P also said it assigned a B+ rating to the group's proposed new facilities to be issued by LSF10 XL Bidco, including a new €175 million revolving credit facility and new €1.15 billion term loan B. The recovery rating on these proposed instruments also is 3.

Xella has announced that, as part of this refinancing, it plans to issue €250 million of new senior secured notes in the next two- to three-weeks, the agency said.

The ratings are supported by the company's diversification across a variety of product lines and end markets, S&P said.

The company operates in a highly cyclical industry, owing to its high exposure to new construction markets that can exhibit volatile demand, the agency noted.

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