S&P drops Keter Group

S&P said it lowered its long-term issuer credit and issue ratings on Keter Group BV to CCC+. The recovery ratings on the term loan and revolver remain 3.

“The downgrade reflects our view that Keter’s credit metrics and FOCF generation will remain weak until the end of 2020. Keter is facing external pressures and the implementation of its internal transformation plan, Keter 2.0, is only at the beginning. We now believe that in the next 12-18 months, adjusted debt to EBITDA will remain above 20x – or above 10x without shareholder loan and preference shares (the non-common equity instruments [NCE] that we treat as debt) – and FFO cash interest coverage will remain below 2.0x, which we view as unsustainable levels,” said S&P in a news release.

The outlook is stable.

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