S&P rates Spinnaker Debtco, loan B-

S&P said it assigned B- ratings to Spinnaker Debtco Ltd. and its planned €675 million-equivalent senior secured term loan. The recovery rating on the loan is 3 (rounded estimate: 55%). The company also plans to secure €160 million committed revolving credit facility. The outlook is positive.

Spinnaker Debtco is the parent of Norgine, a European specialty pharmaceutical company.

“The rating reflects the group's high product and therapeutic area concentration (gastroenterology accounts for 80% of sales) with some execution risk related to the planned sales channel augmentation for Movicol (42% of sales) in key Western European markets and Australia. The group's top four brands account for about 78% of total sales,” the agency said in a press release.

S&P said it expects overall revenue growth of 5%-6% in 2024 following a decrease of about 2% in 2023, and potentially accelerating to 7%-8% in 2025.

The outlook indicates a possible upgrade over the next 12-18 months if Norgine demonstrates robust operating profit growth that results in EBITDA interest coverage improving well beyond 2x, alongside positive FOCF sustained from 2025, S&P said.

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