S&P gives Falabella notes BBB

S&P said it gave its BBB issue-level rating to Falabella SA's upcoming senior unsecured notes offering.

“The rating on the notes is the same as the issuer credit rating on Falabella because we don't believe there are material financial obligations that would rank ahead of the company's unsecured debt by way of structural or contractual subordination, given that priority debt represents 45% of total debt as of June 2021,” S&P said in a press release.

The company will use the proceeds to conduct a cash tender offer to purchase up to $500 million principal of the 3¾% senior notes due 2023 and up to $150 million in aggregate principal of the 4 3/8% senior notes due 2025 (subject to a maximum of $550 million in total principal for both notes). The company is expected to use any remaining proceeds mostly for other short-term debt refinancing.

“The proposed transaction does not affect our view of the company's credit profile because we consider it to be leverage neutral, it extends the maturity profile, and we don't expect it to have a material effect on our previous projections,” S&P said.

The outlook is stable.

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