...- ZF Invest, the holding company of Prosol Group, plans to issue a 1,382 million term loan B and a 250 million revolving credit facility (RCF) to refinance 759 million of existing debt and to repurchase 741 million of shareholders' convertibles. - The proposed transaction will materially increase ZF Invest's leverage, with S&P Global Ratings-adjusted debt to EBITDA of 7.4x-8.1x (or 6.6x-7.2x when excluding the shareholders' convertibles) over fiscal years 2021-2022 (ending Sept. 30), and high expansionary capital expenditure (capex) will constrain free operating cash flow (FOCF). - This is mitigated by Grand Frais' compelling value proposition, supporting above-average profitability, and solid growth prospects, as we expect the ambitious investment will yield double-digit revenue growth over the next few years. - We therefore assigned our preliminary 'B' long-term issuer rating to ZF Invest and our preliminary 'B' issue rating, with a preliminary '3' recovery rating, to the company's proposed...
