S&P rates Auris Luxembourg II loan B+, notes B-

Standard & Poor's affirmed its B+ long-term corporate credit rating on Auris Luxembourg II Sarl (Sivantos), a holding company that owns hearing instruments manufacturer Sivantos Group. The outlook is stable.

At the same time, S&P affirmed its B+ issue rating on the €75 million revolving credit facility, and the €940 million first-lien term loans (comprising the €415 million tranche, including the €110 million add on, and the $600 million tranche) issued by Auris Luxembourg III.

S&P affirmed recovery ratings of 3 on these instruments, in the lower half of the range, indicating the agency’s expectation of meaningful (50%-70%) recovery prospects in the event of a payment default.

S&P also affirmed its B- issue rating on the €275 million senior unsecured notes issued by Sivantos. The recovery rating on the notes is 6, indicating the agency’s expectation of negligible (0%-10%) recovery in the event of a payment default.

The affirmation reflects S&P’s view that the transaction will have a minimal impact on Sivantos' S&P-adjusted debt protection metrics. Sivantos is repaying Siemens' remaining holding in the group using a mix of equity, debt, and debt-like instruments to finance the transaction.

Furthermore, S&P expects continuing improvement in operating performance, which should compensate for increases in debt. The agency projects revenues of between €900 million and €1 billion and EBITDA at about €200 million to €250 million in 2016-2017.

© 2015 Prospect News.
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