S&P rates Progroup secureds B+, toggle notes B-

Standard & Poor’s said it assigned a preliminary B+ long-term corporate credit rating to Progroup AG and JH-Holding Finance SA.

S&P also said it assigned a preliminary B+ rating to Progroup’s proposed €400 million senior secured notes with a recovery rating of 3, indicating 50% to 70% expected default recovery.

The agency also said it assigned a B- rating with a 6 recovery rating to the payment-in-kind toggle notes to be issued by JH-Holding Finance, reflecting an expectation 0 to 10% expected default recovery.

The outlook is stable.

The final ratings will depend on the company’s ability to issue the €400 million of senior secured notes, €125 million PIK toggle notes and sign a €50 million revolving credit facility, S&P said.

The ratings reflect the group’s fair business risk profile and aggressive financial risk profile, the agency said.

The ratings also consider the company’s adequate liquidity following the contemplated refinancing, S&P said, and fair management and governance.

The ratings are constrained by the company’s position as a relatively small player in the oversupplied, fragmented, commodity-like and highly competitive European paperboard market, the agency said.

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