S&P cuts idverde

S&P said it lowered its ratings on Amorica Lux Sarl (idverde) and its €335 million senior secured term loan to B- from B. The loan’s 3 recovery rating (50%-70%; rounded estimate: 55%) is unchanged.

“The downgrade reflects idverde's significantly higher-than-expected leverage, which peaked above 15x in 2021 and will likely, remain elevated in 2022, combined with negative FOCF. The weaker-than-expected financial performance stems from operational setbacks in the group's U.K. business amid lower volumes than anticipated from housebuilder activity and the creation segment. This is due to a combination of inconsistent management decisions at the local level and execution issues, resulting in deteriorated productivity and exceptional losses. The U.K. business also faced a cyber attack, further disrupting operations,” S&P said in a press release.

The agency noted management has started turnaround initiatives; however, it sees leverage remaining at about 9x in 2022.

The outlook is stable.

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