S&P rates Linxens loans B, CCC+

Standard & Poor’s said it assigned a preliminary B long-term corporate credit rating on Financiere Lully C SAS (Linxens).

The agency also said it assigned a preliminary B rating to the proposed €680 million-equivalent first-lien term loans due 2022 and €100 million revolving credit facility due 2022 issued by a financing subsidiary.

S&P also said it assigned a preliminary recovery rating of 3 to both the first-lien loans and the revolver, indicating 50% to 70% expected default recovery.

The agency also said it assigned a preliminary CCC+ rating to the proposed €230 million-equivalent second-lien term loan due 2023 and issued by a financing subsidiary. A preliminary recovery rating of 6 also was assigned to this loan, indicating 0 to 10% expected default recovery.

The outlook is stable.

The ratings reflect the company’s fair business risk profile and highly leveraged financial risk profile, S&P said.

The ratings are constrained by the company’s small size, particularly compared with its main customers, lack of meaningful product diversification, very high customer concentration and its exposure to medium- to long-term technology shifts, the agency said.

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