S&P upgrades Profine, rates notes B

S&P said it raised its rating on Profine (HT Troplast) to B from B- and assigned B issue-level and 3 recovery ratings to its planned €380 million of senior secured notes. The company also plans to upsize its super senior revolver to €85 million from €40 million.

“The upgrade reflects strong deleveraging and cash flow generation improvement over the past years, combined with our expectation that after the 2023 refinancing, Profine will maintain S&P Global Ratings-adjusted leverage between 4x and 5x. Over the past three years, Profine showed consistent and strong deleveraging, with S&P Global Ratings-adjusted debt to EBITDA decreasing from 5.9x as of end-2020 to 4x as of end-2022. We also note that cash flow generation has significantly improved in 2022, with positive FOCF exceeding €18 million,” the agency said in a press release.

Profine plans to use notes to refinance its capital structure, pay a €20 million dividend to the family shareholders, and cover transaction fees and expenses.

The outlook is stable.

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