Research Update: Kleopatra Holdings 1 S.C.A. (Klöckner Pentaplast) Outlook Revised To Stable On Improved Performance; Affirmed At 'B-'

We expect that Kleopatra Holdings 1 S.C.A. (KP1), the ultimate holding company of plastic packaging producer Klöckner Pentaplast, will generate S&P Global Ratings-adjusted EBITDA of about €270 million in 2020, resulting in adjusted free operating cash flow (FOCF) of about €100 million and adjusted debt to EBITDA of about 8.3x. We believe this recent improved operating performance has lowered the group's refinancing risk. We are therefore revising our outlook on KP1 to stable from negative and affirming our 'B-' long-term issuer credit rating on KP1 and its rated subsidiaries. We are affirming our 'B-' issue rating on the senior secured facilities, with the '4'(40%) recovery rating remaining unchanged, and the 'CCC' rating on the payment-in-kind (PIK) notes, with the '6'(0%)

...- We expect that Kleopatra Holdings 1 S.C.A. (KP1), the ultimate holding company of plastic packaging producer Kl÷ckner Pentaplast, will generate S&P Global Ratings-adjusted EBITDA of about 270 million in 2020, resulting in adjusted free operating cash flow (FOCF) of about 100 million and adjusted debt to EBITDA of about 8.3x. - We believe this recent improved operating performance has lowered the group's refinancing risk. - We are therefore revising our outlook on KP1 to stable from negative and affirming our 'B-' long-term issuer credit rating on KP1 and its rated subsidiaries. - We are affirming our 'B-' issue rating on the senior secured facilities, with the '4'(40%) recovery rating remaining unchanged, and the '###' rating on the payment-in-kind (PIK) notes, with the '6'(0%) recovery rating remaining unchanged. - The stable outlook reflects our expectation that KP1 will generate adjusted FOCF of more than 50 million and maintain adjusted debt to EBITDA below 8.5x during the next 12...

Research Update