Bulletin: Garfunkelux Holdco 2 Ratings Not Immediately Affected By Announced Acquisition Of Tesch Inkasso Group

LONDON (S&P Global Ratings) Aug. 17, 2016--S&P Global Ratings said today that its long- and short-term counterparty credit ratings on Garfunkelux Holdco 2 S.A. (B+/Stable/B) are not immediately affected by its announcement that it has acquired Germany-based third-party debt collections company Tesch Inkasso Group. We note that the transaction has been agreed but that the closing is subject to certain regulatory approvals. The acquisition could enhance the group's position in the credit services market in Germany. It already has a presence in this market through GFKL Financial Services AG. However, we also believe that the debt-financed acquisition could pose financial and operational risks. We currently assess the group's financial risk profile based on our expectation that its ratios will remain

...LONDON (S&P Global Ratings) Aug. 17, 2016--S&P Global Ratings said today that its long- and short-term counterparty credit ratings on Garfunkelux Holdco 2 S.A. (B+/Stable/B) are not immediately affected by its announcement that it has acquired Germany-based third-party debt collections company Tesch Inkasso Group. We note that the transaction has been agreed but that the closing is subject to certain regulatory approvals. The acquisition could enhance the group's position in the credit services market in Germany. It already has a presence in this market through GFKL Financial Services AG. However, we also believe that the debt-financed acquisition could pose financial and operational risks. We currently assess the group's financial risk profile based on our expectation that its ratios will remain in the following ranges: + Gross debt to S&P Global Ratings-adjusted EBITDA of 4x-5x (adjusted EBITDA is gross of portfolio amortization); + Funds from operations to total debt of 12%-20%; and...

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