Research Update: Selecta Group B.V. Downgraded To 'CCC-' On Tightening Liquidity And Restructuring Risk; Placed On CreditWatch Negative

Despite the recent capital injection from KKR and easing of lockdown conditions, we forecast pan-European vending machine operator Selecta Group B.V.'s (Selecta's) cash position to deteriorate beyond our prior base case and result in a tightened liquidity position. In light of our revised expectations of subdued financial performance persisting though second-half 2020, we expect the group to have limited headroom to meet an interest payment of about €37 million in October, resulting in a heightened risk of default over the next six months. As a result, we are lowering: our long-term issuer credit rating on Selecta to 'CCC-' from 'B-'; the issue ratings on the group's senior secured notes to 'CCC-' from 'B-'; and the issue ratings on the super

...- Despite the recent capital injection from KKR and easing of lockdown conditions, we forecast pan-European vending machine operator Selecta Group B.V.'s (Selecta's) cash position to deteriorate beyond our prior base case and result in a tightened liquidity position. - In light of our revised expectations of subdued financial performance persisting though second-half 2020, we expect the group to have limited headroom to meet an interest payment of about 37 million in October, resulting in a heightened risk of default over the next six months. - As a result, we are lowering: our long-term issuer credit rating on Selecta to '###-' from 'B-'; the issue ratings on the group's senior secured notes to '###-' from 'B-'; and the issue ratings on the super senior revolving credit facility (RCF) to '###+' from 'B+'. The recovery ratings remain unchanged. - We are also placing the ratings on CreditWatch with negative implications, indicating our view of a risk that the group could undergo a debt exchange...

Research Update