Research Update: Howden Group Holdings Ltd. 'B' Ratings Affirmed On Acquisition-Linked Debt Issuance; Outlook Stable

U.K.-based Howden Group Holdings Ltd. (Howden) plans to raise $500 million of new first-lien term loan due 2030 and ordinary equity of £300 million to prefund mergers and acquisitions (M&A) and fund its lockbox account for future M&A by £406 million. The group's revolving credit facility (RCF) is also being upsized to £360 million from £185 million. Despite higher interest costs, we expect Howden to deleverage and generate sound positive free operating cash flow (FOCF) on the back of strong organic growth. We therefore affirmed our 'B' long-term issuer credit rating on Howden and its financing subsidiaries HIG Finance 2 Ltd. and Hyperion Refinance S.a.r.l. and our 'B' issue ratings and '3' recovery ratings on the group's existing first-lien term

...- U.K.-based Howden Group Holdings Ltd. (Howden) plans to raise $500 million of new first-lien term loan due 2030 and ordinary equity of ú300 million to prefund mergers and acquisitions (M&A) and fund its lockbox account for future M&A by ú406 million. - The group's revolving credit facility (RCF) is also being upsized to ú360 million from ú185 million. - Despite higher interest costs, we expect Howden to deleverage and generate sound positive free operating cash flow (FOCF) on the back of strong organic growth. - We therefore affirmed our 'B' long-term issuer credit rating on Howden and its financing subsidiaries HIG Finance 2 Ltd. and Hyperion Refinance S.a.r.l. and our 'B' issue ratings and '3' recovery ratings on the group's existing first-lien term loans, including the new $500 first-lien term loan B. - The stable outlook indicates that we think Howden is likely to continue to demonstrate strong organic growth in 2023-2024 and will gain EBITDA from recent acquisitions, with operating...

Research Update