Research Update: EP Bco (Euroports) Outlook Revised To Negative On Delayed Deleveraging; Ratings Affirmed

EP Bco S.A., the nonoperating holding company of international port infrastructure operator Euroports Holdings S.a.r.l. (Euroports), intends to issue an incremental €50 million add-on to its first-lien term loan to fund an acquisition and partially repay its outstanding revolving credit facility (RCF) borrowings. In conjunction with the add-on, Euroports is seeking to reprice the term loan on a best-efforts basis. We expect the combination of increased leverage and weaker operating performance in third-quarter 2020 to result in S&P Global-adjusted funds from operations (FFO) to debt averaging 7%, our trigger level for a downgrade, with adjusted debt to EBITDA of about 7x breaching our downgrade threshold of 6.5x. Therefore, we are revising our outlook on EP Bco to negative from stable

...- EP Bco S.A., the nonoperating holding company of international port infrastructure operator Euroports Holdings S.a.r.l. (Euroports), intends to issue an incremental 50 million add-on to its first-lien term loan to fund an acquisition and partially repay its outstanding revolving credit facility (RCF) borrowings. In conjunction with the add-on, Euroports is seeking to reprice the term loan on a best-efforts basis. - We expect the combination of increased leverage and weaker operating performance in third-quarter 2020 to result in S&P Global-adjusted funds from operations (FFO) to debt averaging 7%, our trigger level for a downgrade, with adjusted debt to EBITDA of about 7x breaching our downgrade threshold of 6.5x. - Therefore, we are revising our outlook on EP Bco to negative from stable and affirming our '##-' long-term issuer credit rating on the company. - At the same time, we are affirming our '##-' issue and '3' recovery ratings on the first-lien term loan and RCF and our 'B' issue...

Research Update