Netherlands-Based Value Retailer Action 'B+' Ratings Affirmed On Proposed Dividend Recapitalization; Outlook Stable

Netherlands-based value retailer Action intends to fund a €760 million shareholder distribution and refinance its existing debt with the proceeds of a new €2,285 million term loan. We believe Action's credit metrics post-transaction remain commensurate with the 'B+' rating and our assessment of the group's financial policy. We are therefore affirming our 'B+' long-term issuer credit rating on Action's parent, Peer Holding III B.V. The recovery rating on the proposed instruments reflects the significant increase in the amount of senior secured debt post-transaction, and the relatively weak security and guarantee package, which includes a cap on the amount of upstream guarantees provided by Action Holding B.V. The stable outlook reflects our view that Action will continue to successfully implement its

...+ Netherlands-based value retailer Action intends to fund a 760 million shareholder distribution and refinance its existing debt with the proceeds of a new 2,285 million term loan. + We believe Action's credit metrics post-transaction remain commensurate with the 'B+' rating and our assessment of the group's financial policy. We are therefore affirming our 'B+' long-term issuer credit rating on Action's parent, Peer Holding III B.V. + The recovery rating on the proposed instruments reflects the significant increase in the amount of senior secured debt post-transaction, and the relatively weak security and guarantee package, which includes a cap on the amount of upstream guarantees provided by Action Holding B.V. + The stable outlook reflects our view that Action will continue to successfully implement its profitable expansion strategy. However, we consider financial policy on the part of the financial sponsor, 3i, limits future deleveraging prospects. LONDON (S&P Global Ratings) Jan. 29,...

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