S&P rates CIH International loan BBB-

S&P said it assigned a BBB- rating with 2 recovery rating to CIH International Sarl's proposed $400 million European term loan A-2 facility.

CIH International is an indirect wholly owned subsidiary of Constellation Brands Inc.

The proceeds will be used for general corporate purposes.

The 2 recovery rating indicates 70% to 90% expected default range.

The recovery rating on the European term loans reflects a roughly $7 billion enterprise valuation at default and the structurally senior claim to the value of the company's non-U.S. subsidiaries as there is no contractual mechanism to equalize recovery rates among all bank lenders, S&P said.

The emergence of about $7 billion at Constellation Brands provides greater recovery value to the senior secured euro term loan lenders because they benefit on a priority basis ahead of the dollar-denominated senior secured lenders and senior unsecured noteholders, the agency added.

Constellation Brands owns the sole U.S. distribution rights for Corona and other leading Mexican beer brands like Modelo and Pacifico, with close to a 50% market share of beer imports to the United States, where the company generates about 90% of its sales, S&P explained.

The company's wine portfolio adds more diversification, boasting top market positions in the United States and Canada within the premium to super-premium price points and benefits from strong brand recognition, the agency said.

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