Research Update: Selecta Group B.V. Downgraded To 'SD' (Selective Default) On Court Approval Of Its Recapitalization Plan

On Oct. 27, 2020, the England and Wales High Court sanctioned the scheme of arrangement proposed by pan-European vending machine operator Selecta Group B.V. and backed by the group's creditors. Selecta can now undertake a recapitalization of the capital structure, with an alleviation in cash interest and exchange of its outstanding senior secured notes for amended securities with a tenor extending to 2026. We view the transaction as a distressed exchange, and are therefore lowering our issuer credit rating on Selecta to 'SD' (selective default) from 'CC', and our issue ratings on the senior secured notes to 'D'. We are leaving the 'CCC' issue rating on the super senior revolving credit facility (RCF) unchanged, since we view the extended RCF

...- On Oct. 27, 2020, the England and Wales High Court sanctioned the scheme of arrangement proposed by pan-European vending machine operator Selecta Group B.V. and backed by the group's creditors. - Selecta can now undertake a recapitalization of the capital structure, with an alleviation in cash interest and exchange of its outstanding senior secured notes for amended securities with a tenor extending to 2026. - We view the transaction as a distressed exchange, and are therefore lowering our issuer credit rating on Selecta to '##' (selective default) from '##', and our issue ratings on the senior secured notes to 'D'. We are leaving the '###' issue rating on the super senior revolving credit facility (RCF) unchanged, since we view the extended RCF tenor as adequately compensated by the new interest rate step-up in fiscal year ending Dec. 31, 2023 (FY2023), and financial maintenance covenants. - The recovery ratings remain unchanged, with meaningful recovery prospects on the senior secured...

Research Update