S&P cuts Colisee Group

S&P said it lowered the ratings on Colisee Group and its €1.025 billion term loan, including the proposed €150 million add-on, to B- from B.

“Colisee's more aggressive financial policy than S&P Global Ratings anticipated, combined with high starting leverage, reduce prospects for adjusted leverage to decrease below 7x by 2022.The company accelerated the pace of debt-funded acquisitions in first-quarter 2021, spending €150 million-€160 million on nine acquisitions in France and Spain, well above our previous expectations of €40 million of yearly acquisition spending for the group,” the agency said in a press release.

Colisee funded these almost entirely with drawdowns under its €175 million revolver, which it now plans to pay down with the €150 million proposed add-on. Concurrently, the group's other debt, including mainly real estate debt, rocketed to €100 million-€110 million as of March 2021 from €25 million at the end of October 2020.

“We forecast these issuances will lead to an S&P Global Ratings-adjusted debt-to-EBITDA ratio of about 8x by end-2021 (pro rata the EBITDA contributions from the acquisitions) compared with our initial projection of 7x-7.5x,” the agency said.

The outlook is stable.

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