S&P upgrades Befesa

S&P said it raised the long-term issuer credit rating on the Befesa SA to BB from BB-.

The outlook is stable.

The agency also said it raised the ratings on the €526 million term loan B and €75 million revolving credit facility to BB+ from BB-.

S&P said it revised the recovery rating on both upward to 2 from 3, indicating 70% to 90% expected default recovery.

The upgrades reflect Befesa's robust results in the first nine months of 2018, the agency said, and an expectation that results will continue to improve over the next few years.

The upgrades reflect the track record Befesa has established under its new financial policy, which supports further de-leveraging, S&P said.

Under the updated base-case scenario, the agency said it projects an adjusted debt-to-EBITDA ratio of between 2x to 2.5x in 2018 and 2019, the agency said.

Befesa, which provides recycling services to the secondary steel and aluminum industries, has enjoyed robust operating and financial performance in the last few years, S&P said.

The credit metrics were supported by higher volumes, favorable prices and operational excellence in both steel and aluminum businesses, the agency said.

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