S&P rates Auris Luxembourg loans B+, notes B-

Standard & Poor's said it assigned its preliminary B+ long-term corporate credit rating to Auris Luxembourg II Sarl, a Luxembourg-based holding company set up for the acquisition Siemens Audiology Solutions by a consortium of investors led by Swedish private equity firm, EQT.

The outlook is stable.

At the same time, the agency assigned a preliminary B+ issue rating to the proposed €75 million revolving credit facility and the proposed €745 million first-lien term loan to be issued by Auris III Luxembourg Sarl. The preliminary recovery ratings are 3, indicating an expectation of meaningful (50%-70%) recovery prospects in the event of a payment default.

S&P also assigned a preliminary B- issue rating to the proposed €315 million senior unsecured notes to be issued by Auris Luxembourg II. The preliminary recovery rating on the notes is 6, indicating an expectation of negligible (0%-10%) recovery in the event of a payment default.

The agency said the positive comparable rating analysis primarily reflects Siemens’ strong free cash flow generation and cash interest coverage, supported by the calculation of funds from operations to cash interest coverage comfortably above 2 times. It further reflects the agency’s view of Siemens' business risk profile as firmly within the "fair" category, reflecting that the company is steadily improving its EBITDA margin.

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