S&P trims Keter

S&P said it lowered its ratings for Keter Group BV and its €1.205 billion term loan to B- from B and placed them on CreditWatch with negative implications.

“The downgrade to B- follows our current expectation that Keter's FY2022-FY2023 performance will be hit by high-cost inflation, particularly increases in raw materials, energy, and freight costs. Its performance will also be impaired by recessionary pressures and a decline in consumer purchase power, which we believe will lessen the demand for outdoor and indoor storage and furniture from the end of 2022,” S&P said in a press release.

The agency noted Keter’s term loan and €102 million revolver mature within 12 months. “This has created significant pressure on Keter's liquidity position, which, as a result, we assess as weak. We understand Keter is currently engaging with lenders and negotiating refinancing. However, there is still uncertainty about the successful completion of this and on the company's ability to secure refinancing in the next months ahead of maturity,” the agency noted.

The CreditWatch reflects the position that a downgrade is likely unless Keter refinances its term loan within the next three months or provides more details on its progress in refinancing the loan, S&P said.

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