Fitch gives Luna III BB

Fitch Ratings said it assigned Luna III Sarl an expected long-term issuer default rating of BB and its proposed €1.63 billion term loan an expected senior secured rating of BB+ with an RR2 recovery rating.

Platinum Equity plans to acquire Urbaser and will use Luna as the holding company.

“Luna's BB (EXP) IDR reflects the post-acquisition capital structure, which implies a re-leverage above our negative sensitivity of 5.2x for the next two years. Rating strengths are a stable and predictable revenue stream backed by long-term waste contracts with municipalities with limited volume and price risk, largely in Spain. The business is complemented by shorter-term and more volatile contracted revenue with industrial and commercial (I&C) counterparties,” Fitch said in a press release.

The outlook is stable.

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