S&P assigns MEIF 5 notes BB

S&P said it assigned a BB rating with a recovery rating of 4 to MEIF 5 Arena Holdings’ planned €575 million of senior secured notes to refinance debt and pay about €90 million in distributions to its shareholders.

“In our view, the proposed refinancing will reduce MEIF 5’s already limited rating headroom, since it will increase the company’s debt burden despite the increase in maturity and lower cost of debt. The proposed refinancing includes €575 million of senior secured notes (to be split between fixed-rate and floating-rate tranches) as well as a new revolving credit facility (RCF), which has increased to €100 million from €75 million. Notably, the transaction will lead to an increase in adjusted debt to EBITDA to 7.7x in 2020 from our 2019 expectation of 7.5x for the 2018-2020 period,” said S&P in a press release.

S&P affirmed its BB rating on MEIF 5. The outlook is stable.

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