Moody's put SKG debt on upgrade review
08/02/2012 at 11:50
Moody's Investors Service has today placed all ratings of Smurfit Kappa Group plc SKG under review for possible upgrade, including the group's Ba3 Corporate Family Rating and Probability of Default Rating.
Around E1.6 billion of rated debt would be affected.
The rating action follows SKG's release of preliminary 2011 results and the launch of an amend-and-extend process, aimed at terming out sizeable bank debt maturities and including debt repayments.
"The rating action reflects SKG's progress in reducing the group's leverage due to continued positive free cash flow generation as well as expected benefits from the announced amend-and-extend process on the back of material debt repayments and a term out of maturities. Should the amend-and-extend agreement be implemented with no material changes to the announced terms and conditions, Moody's would expect to upgrade SKG's CFR to Ba2. Concurrently, instrument ratings would be upgraded by one notch to Ba1 for the senior secured notes and B1 for the subordinated notes," said Moody's.