S&P rates Verde Bidco, notes B

S&P said it assigned preliminary B ratings to Verde Bidco SpA (Itelyum) and its planned €450 million of new senior secured notes. The recovery rating on the notes is 4, indicating expectations of average recovery prospects (30%-50%; rounded estimate: 40%) in default.

Stirling Square Capital Partners and Deutsche Beteiligungs AG, minority investor, plan to buy Verde Bidco SpA (Itelyum) for its Fund IV from its Fund III for an enterprise value of €785 million. They plan to use the notes proceeds and an equity contribution of of €312.5 million.

“Pro forma the transaction, we forecast Itelyum's S&P Global Ratings-adjusted debt to EBITDA at around 8.2x-8.4x at year-end 2021, followed by deleveraging to 7x-7.6x in 2022-2023,” S&P said in a press release.

The outlook is stable.

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