S&P rates National Group, notes B

S&P said it assigned preliminary B ratings to National Group Corp. Pty. Ltd. and its planned $275 million of three-year senior secured notes with a recovery rating of 4, reflecting average (30% to 50%; rounded estimate: 35%) recovery prospects in a payment default.

Proceeds will be used to refinance facilities. The company aims to repay its OCP Asia loan obligations and super senior loan obligation, as well as invest in growth capital expenditure for contract fleet renewals that should incrementally add revenues and EBITDA in the following years, the agency said.

The proceeds are likely to be swapped into Australian dollars from U.S. dollars, eliminating interest expense volatility from currency fluctuations, S&P said.

The outlook is stable.

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