Fitch lowers Algeco view to negative

Fitch Ratings said it revised the outlook on Algeco Global Sarl's long-term issuer default rating to negative from stable and affirmed the issuer default rating at B.

The agency also said it has affirmed the senior secured notes issued by Algeco Global Finance plc at B+ with a recovery rating of RR3 and senior unsecured notes issued by Algeco Global Finance 2 plc at CCC+ with a recovery rating of RR6.

Algeco Finance's €125 million senior secured tap issue will be rated in line with Algeco Finance's outstanding senior secured notes.

The dual-tranche tap issue carries the same terms and conditions as Algeco Finance's existing senior secured notes, Fitch said.

The proceeds will be used from the issuance to repay an existing €96 million sale-and-lease-back facility and to increase cash on balance sheet, the agency said.

The outlook revision follows news that Algeco has agreed to dispose of its North American remote accommodation business, Target Lodging, to Platinum Eagle Acquistion Corp., Fitch said.

Upon closing, Algeco expects to receive €486 million in cash and €223 million in Platinum Eagle shares, the agency said.

The outlook revision reflects the agency's view of elevated execution risk associated with Algeco's post-closing deleveraging profile and its need to notably improve EBITDA to ensure positive free cash flow in the short- to medium-term, Fitch said.

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