S&P assigns B to SGL bonds

S&P said it assigned B issue-level and 4 recovery ratings (30%-50%, rounded estimate: 40%) to SGL Group ApS’ (formerly Skill Bidco ApS) planned bonds due 2030. The issue is expected to be up to €500 million.

The agency said it also changed its outlook for SGL to positive from stable and affirmed the B ratings on the issuer and its floating-rate notes due 2028. The 4 recovery rating is unchanged.

“SGL continues to benefit from decent trade volumes, a diverse customer base, and new contract wins while enlarging its scale over the past few years, which, combined with earnings contribution from the planned acquisitions, could offset the increase in debt and allow the company to potentially reach and sustain S&P Global Ratings-adjusted leverage (debt to EBITDA) of less than 4.5x,” S&P said in a press release.

The group intends to use the majority to tender and repay part of its 2028 notes. The rest, about €100 million, will be earmarked for future acquisitions, supplementing the €136 million of cash on hand at year-end 2023.

“The positive outlook reflects the possibility of an upgrade over the next 12 months if SGL appears on track to achieve its ratings-commensurate credit measures,” S&P said.

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