S&P lifts Constellation Brands to positive

Standard & Poor’s said it affirmed the BB+ corporate credit rating on Constellation Brands Inc. and revised the outlook to positive from stable.

The agency also said it raised the rating on the $1.43 billion senior secured euro term loan A issued by subsidiary CIH International SARL to BBB- from BB+ with a revised recovery rating of 2, indicating 70% to 90% recovery range, from 3.

S&P also said it assigned a BBB- rating with a 2 recovery rating to the company’s new $700 million euro term loan A-1 issued by CIH Holdings SARL.

The agency also said it affirmed the BB+ rating on the company’s U.S. dollar senior secured term loans, revolving credit facility and unsecured notes.

The recovery ratings are unchanged at 3, indicating 50% to 70% expected default recovery.

The outlook revision reflects an opinion that the company’s profit growth over the next 12 to 18 months will result in an EBITDA base close to $2.5 billion, which is enough to mute the leveraging impact of future acquisitions, S&P said.

The company just closed its Ballast Point acquisition, which also had a muted leverage impact, the agency said.

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