Research Update: Selecta Group B.V. Downgraded To 'CC' On Announced Distressed Exchange Offer; Remains On CreditWatch Negative

On Sept. 8, 2020, pan-European vending machine operator Selecta Group B.V. announced its intention to undertake a recapitalization with an alleviation in cash interest and extension of current debt maturities to 2026, and asked its lenders to enter into a lock-up agreement. We view the proposed transaction as a distressed exchange, with investors receiving less value than the promise of the original securities, which is tantamount to a default under our criteria. We are therefore lowering our long-term issuer credit rating on Selecta to 'CC' from 'CCC-', and our issue ratings on its super senior revolving credit facility (RCF) and senior secured notes to 'CCC' and 'CC' respectively. The recovery ratings remain unchanged, with meaningful recovery prospects on the senior

...- On Sept. 8, 2020, pan-European vending machine operator Selecta Group B.V. announced its intention to undertake a recapitalization with an alleviation in cash interest and extension of current debt maturities to 2026, and asked its lenders to enter into a lock-up agreement. - We view the proposed transaction as a distressed exchange, with investors receiving less value than the promise of the original securities, which is tantamount to a default under our criteria. - We are therefore lowering our long-term issuer credit rating on Selecta to '##' from '###-', and our issue ratings on its super senior revolving credit facility (RCF) and senior secured notes to '###' and '##' respectively. The recovery ratings remain unchanged, with meaningful recovery prospects on the senior secured notes (rounded estimate: 50%) and very high prospects on the super senior RCF (rounded estimate: 95%). - The CreditWatch placement indicates our expectation that we could lower our ratings on Selecta and its...

Research Update