S&P keeps Smurfit Kappa on positive watch

Standard & Poor's said it was maintaining its credit ratings, including its B+ long-term corporate credit rating, on Smurfit Kappa Group Ltd. and related entities on CreditWatch with positive implications.

Subject to a successful completion of the group's announced €1.3 billion IPO to be used for repayments of part of its high cost debt, the corporate credit rating on Smurfit Kappa will be raised by one notch to BB- with subsequent one notch uplifts for the secured and unsecured debt ratings, the agency said.

The agency added that the recovery rating is expected to remain unchanged.

A successful IPO and subsequent debt repayments, including repayment of the group's about €500 million PIK notes, will materially improve Smurfit Kappa's financial profile, although it should be noted that the current credit measures are very weak for the existing ratings, S&P said.

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