S&P assigns B- to Planet, loans

S&P said it assigned preliminary B- ratings to AI Silk Midco Ltd. (Planet), its planned €143 million revolving credit facility and its proposed €910 million senior secured term loan B. The outlook is stable.

“We anticipate exceptional costs related to the operating efficiency program will depress S&P Global Ratings-adjusted EBITDA and cash flows in 2024, leading to very high adjusted leverage of about 12x and modestly negative free operating cash flow (FOCF). We expect healthy net revenue and materially lower exceptional costs from 2025 will strengthen the adjusted EBITDA margin toward 24% and reduce adjusted leverage toward 7x. The proposed transaction should provide the group with sufficient liquidity and extends its maturity profile,” S&P said in a press release.

Planet will use the proceeds to redeem the outstanding €457 million TLB issued by Franklin UK Bidco, the €77 million drawn RCF, and the €254 million unitranche facility issued by AI Silk UK Midco 1. The agency will withdraw the ratings once the debt is repaid.

“The outlook is stable because we expect Planet will generate 12%-13% net revenue growth, materially reduce exceptional costs from mid-2024, with adjusted debt peaking at about 12x in 2024 and reducing toward 7x in 2025, and its FOCF turning positive in 2025, all while Planet maintains adequate liquidity,” the agency said.

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