S&P rates WD FF notes B

S&P said it assigned a B rating to the £475 million-equivalent senior secured notes that WD FF Ltd. (Iceland Group) plans to sell and revised its outlook to stable from negative.

The agency also affirmed Iceland Group’s B issuer rating, BB issue ratings on the amended and extended super senior revolving credit facility and B issue rating on the senior secured notes.

Iceland Group posted strong underlying trading results in fiscal 2023, ended March 24, 2023, despite high energy costs, with about £4 billion of revenue and S&P Global Ratings-adjusted EBITDA of £252 million. “We expect the group to continue to deliver earnings growth and improving margins amid resilient demand and cost savings, including measures to lock in lower energy costs from 2024,” the agency said in a press release.

The stable outlook reflects the view the group will keep delivering earnings growth amid resilient demand, with EBITDA margins above 7% resulting in adjusted debt to EBITDA declining toward 4.5x-5x in 2024 from 5.7x in 2023, although increasing cash interest expenses post refinancing will leave EBITDAR coverage at about 1.5x-1.6x, S&P said.

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