Keter Group B.V. Downgraded To 'CCC+' On High Debt Leverage And Operating Challenges; Outlook Stable

Household product manufacturer Keter Group B.V.'s operating performance continues to trend below our previous forecasts, as it starts to implement its turnaround plan while facing ongoing internal and external hurdles. We expect that Keter's credit metrics will remain weak until the end of 2020, with S&P Global Ratings-adjusted debt to EBITDA above 20x with shareholder loan and preference shares included, or above 10x without them; funds from operations (FFO) cash interest coverage will remain below 2x; and a return to positive free operating cash flow (FOCF) generation is uncertain. We are therefore lowering our long-term issuer credit and issue ratings on Keter Group to 'CCC+'. The recovery ratings on the term loan and revolving credit facility (RCF) remain '3'. The

...+ Household product manufacturer Keter Group B.V.'s operating performance continues to trend below our previous forecasts, as it starts to implement its turnaround plan while facing ongoing internal and external hurdles. + We expect that Keter's credit metrics will remain weak until the end of 2020, with S&P Global Ratings-adjusted debt to EBITDA above 20x with shareholder loan and preference shares included, or above 10x without them; funds from operations (FFO) cash interest coverage will remain below 2x; and a return to positive free operating cash flow (FOCF) generation is uncertain. + We are therefore lowering our long-term issuer credit and issue ratings on Keter Group to '###+'. The recovery ratings on the term loan and revolving credit facility (RCF) remain '3'. + The outlook is stable, reflecting our view that Keter should be able to fund its day-to-day operations in the next 12 months. LONDON (S&P Global Ratings) Sept. 27, 2019--S&P Global Ratings today took the rating actions...

Ratings Action