S&P gives B to Groupe Ecore bond

S&P said it assigned its preliminary B long-term issuer credit rating to Groupe Ecore Luxembourg SAS, co-controlled by private equity firm H.I.G. Capital and the Dauphin family. The outlook is stable.

At the same time, S&P assigned a preliminary B issue rating to Ecore's proposed €255 million senior secured bond. The preliminary recovery rating is 3, reflecting an expectation of meaningful recovery (50%-70%; rounded estimate: 50%) in the event of default.

“Our preliminary B rating on Ecore reflects the company's relatively small size, but at the same time comfortable leverage and ability to generate a positive free cash flow. Under the proposed €255 million senior secured debt issue, we expect the company's adjusted debt to EBITDA to be at about 4.5x in the coming years,” S&P said in a news release.

“Our current rating is somewhat capped by the short track record under its new ownership, lack of defined financial policy, and the ability to maintain the current business model.”

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