Research Update: Bright Bidco B.V. Upgraded To 'B-' On Completed Financial Restructuring; Term Loan Rated 'B'; Outlook Negative

Lighting solutions manufacturer Bright Bidco B.V. (doing business as Lumileds) emerged from its bankruptcy process initiated on Aug. 29, 2022, with a more viable capital structure, consisting of a $300 million term loan due 2027. We anticipate the company will progressively restore revenue growth and generate improved S&P Global Ratings-adjusted EBITDA margins of 8%-9% in 2023, translating into modestly positive free operating free cash flow (FOCF) and debt to EBITDA decreasing to 5x-6x. We therefore raised our long-term issue credit rating on Lumileds to 'B-' from 'D' and assigned our 'B' issue rating and '2' recovery rating to its $300 million term loan. The negative outlook reflects the uncertain recovery path of Lumileds' earnings in the next 12 months due

...- Lighting solutions manufacturer Bright Bidco B.V. (doing business as Lumileds) emerged from its bankruptcy process initiated on Aug. 29, 2022, with a more viable capital structure, consisting of a $300 million term loan due 2027. - We anticipate the company will progressively restore revenue growth and generate improved S&P Global Ratings-adjusted EBITDA margins of 8%-9% in 2023, translating into modestly positive free operating free cash flow (FOCF) and debt to EBITDA decreasing to 5x-6x. - We therefore raised our long-term issue credit rating on Lumileds to 'B-' from 'D' and assigned our 'B' issue rating and '2' recovery rating to its $300 million term loan. - The negative outlook reflects the uncertain recovery path of Lumileds' earnings in the next 12 months due to volatile end market demand and the risk of prolonged cost inflation and supply chain disruptions. We believe this could alter the company's cash flow generation and deleveraging trajectory....

Research Update