Research Update: Cirsa Enterprises S.A.U. Upgraded To 'B+'; Outlook Stable; Proposed Notes Rated 'B+'

Spain-based Cirsa Enterprises S.A.U. (Cirsa) proposes to partly refinance its capital structure with €600 million senior secured notes. It expects to use the proceeds to redeem its €390 million 2025 senior notes, partially repay the payment-in-kind (PIK) notes issued by LHMC Finco 2 Sarl, and repay 10% of its 10.375% senior notes due 2027, in a transaction we see as leverage neutral because we already consolidated the PIK. Cirsa has continued to gain market share through a combination of organic growth and disciplined mergers and acquisitions (M&A), and as a result we expect S&P Global Ratings-adjusted leverage to decline to 4.8x as of year-end 2023 (from 5.4x in 2022). We think Cirsa's revenue will continue to increase, and the company

...- Spain-based Cirsa Enterprises S.A.U. (Cirsa) proposes to partly refinance its capital structure with 600 million senior secured notes. It expects to use the proceeds to redeem its 390 million 2025 senior notes, partially repay the payment-in-kind (PIK) notes issued by LHMC Finco 2 Sarl, and repay 10% of its 10.375% senior notes due 2027, in a transaction we see as leverage neutral because we already consolidated the PIK. - Cirsa has continued to gain market share through a combination of organic growth and disciplined mergers and acquisitions (M&A), and as a result we expect S&P Global Ratings-adjusted leverage to decline to 4.8x as of year-end 2023 (from 5.4x in 2022). - We think Cirsa's revenue will continue to increase, and the company will sustain its improved financial profile in the coming 12 months, with adjusted leverage trending toward 4.5x and free operating cash flow (FOCF) to debt over 5% on a sustainable basis. - We raised to 'B+' from 'B' our long-term issuer credit rating...

Research Update