Research Update: HSE Finance S.a.r.l., Parent Of HSE24 Trading, Assigned Preliminary 'B' Rating On Refinancing; Outlook Stable

TV home shopping omni-channel retailer HSE24 intends to refinance its €393 million uni-tranche debt and fund a €243 million dividend to shareholder Providence Equity Partners with €630 million of new senior secured notes issued by newly created holding company HSE Finance S.a.r.l (HSE). Post refinancing, we forecast HSE's S&P Global Ratings-adjusted leverage will increase to 5.0x-5.5x in 2021 from about 3.5x estimated in 2020. We are therefore assigning our 'B' preliminary long-term issuer credit and issue ratings to HSE Finance S.a.r.l. and the proposed senior secured notes, with a preliminary recovery rating of '3'. The stable outlook reflects our view that, although trading will likely stay depressed in the eurozone retail industry until mid-year 2021 due to COVID-19-related disruption, we

...- TV home shopping omni-channel retailer HSE24 intends to refinance its 393 million uni-tranche debt and fund a 243 million dividend to shareholder Providence Equity Partners with 630 million of new senior secured notes issued by newly created holding company HSE Finance S.a.r.l (HSE). - Post refinancing, we forecast HSE's S&P Global Ratings-adjusted leverage will increase to 5.0x-5.5x in 2021 from about 3.5x estimated in 2020. - We are therefore assigning our 'B' preliminary long-term issuer credit and issue ratings to HSE Finance S.a.r.l. and the proposed senior secured notes, with a preliminary recovery rating of '3'. - The stable outlook reflects our view that, although trading will likely stay depressed in the eurozone retail industry until mid-year 2021 due to COVID-19-related disruption, we expect S&P Global Ratings-adjusted debt to EBITDA at 5.0x-5.5x along with free operating cash flow (FOCF) after lease payments of more than 45 million for the full year....

Research Update