S&P applies B+ to Action CFR, loans

Standard & Poor's said it assigned its B+ long-term corporate credit rating to Action Holding BV.

The outlook is stable.

At the same time, the agency assigned B+ issue ratings to the proposed €780 million term loan due 2021 and the proposed €60 million super senior revolving credit facility due 2020. The recovery rating on these instruments is 3, indicating an expectation of meaningful (50%-70%) recovery prospects.

S&P said the ratings reflect its view of Action Holding's "highly leveraged" financial risk profile and "satisfactory" business risk profile, according to criteria. Its view of Action's financial risk profile as "highly leveraged" mainly reflects the company's aggressive financial policy, under its ownership by a financial sponsor.

This proposed transaction is the second major dividend recapitalization since the acquisition of Action Holdings in 2011 by the funds advised by 3i Group. Following a dividend recapitalization in 2013, the company has been able to rapidly deleverage as a result of a successful execution of its store expansion strategy, which has led to strong sales and profit growth, S&P said.

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