S&P rates Belvedere notes B

Standard & Poor's said it assigned a B long-term corporate credit rating to Belvedere SA and a B debt rating with a recovery rating of 4 to the company's proposed €300 million senior secured floating-rate notes due 2013. The outlook is stable.

Proceeds from the notes will be used to fund the acquisition of Marie Brizard & Roger International. Simultaneously, Belvedere is being acquired by its major shareholder, CL Financial Ltd., a privately owned conglomerate based in Trinidad and Tobago. CL Financial has increased its stake in Belvedere, contributed to the acquisition of Marie Brizard & Roger through an equity contribution and has launched a mandatory takeover offer to achieve control over the combined company.

S&P said the ratings reflects Belvedere's highly leveraged financial profile on completion of the acquisition, with debt to EBITDA expected to be about 7x; the combined group's exposure to the highly competitive, mature and consolidating French and Polish spirit and wine industries; its positioning in the low and medium market segments; and the reliance on price increases in the stagnating Polish vodka market for future growth.

These negative rating factors are partially mitigated by the increased diversity in terms of product mix and geography following the acquisition, the agency said.

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