Research Update: Outlook On Netherlands-Based House of HR Group Revised To Negative On Weaker-Than-Expected Performance; Affirmed At 'B'

House of HR Group BV's (HOHR's) operating performance is affected by weaker volumes in a stalling macroeconomic environment, prompting us to lower our forecasts for 2024-2025. We expect that, in 2024-2025, HOHR's leverage will remain elevated at 6.7x-7.2x, as adjusted by S&P Global Ratings, while funds from operations (FFO) to cash interest coverage will remain tight at 1.5x-1.6x. We therefore revised our outlook to negative from stable and affirmed our 'B' long term-term issuer credit rating on HOHR. We also affirmed our 'B' issue rating on the group's first-lien debt. The '3' recovery rating indicates our expectation of meaningful recovery prospects (50%-70%; rounded estimate: 55%). The negative outlook indicates that HOHR might not be able to deleverage and its FFO

...- House of HR Group BV's (HOHR's) operating performance is affected by weaker volumes in a stalling macroeconomic environment, prompting us to lower our forecasts for 2024-2025. - We expect that, in 2024-2025, HOHR's leverage will remain elevated at 6.7x-7.2x, as adjusted by S&P Global Ratings, while funds from operations (FFO) to cash interest coverage will remain tight at 1.5x-1.6x. - We therefore revised our outlook to negative from stable and affirmed our 'B' long term-term issuer credit rating on HOHR. We also affirmed our 'B' issue rating on the group's first-lien debt. The '3' recovery rating indicates our expectation of meaningful recovery prospects (50%-70%; rounded estimate: 55%). - The negative outlook indicates that HOHR might not be able to deleverage and its FFO to cash interest coverage remains materially below 2x for a prolonged period....

Research Update