Bangkok--20 Sep--S&P Global Ratings
LONDON (S&P Global Ratings) Sept. 20, 2016--S&P Global Ratings said today thatit placed its 'BB-' long-term counterparty credit rating on Jerrold HoldingsLtd. (trading as Together) on CreditWatch with negative implications.
At the same time, we placed the 'BB-' issue rating on Jerrold Finco PLC'ssenior secured notes on CreditWatch with negative implications.
Together announced on Sept. 15, 2016 that its majority shareholder intends toundertake a debt-financed buyout of its two private equity investors,Equistone and Standard Life, which have been shareholders since 2006 andjointly hold 30% of voting rights. The group expects the debt to be issued
from a new intermediate holding company, which will sit above Jerrold HoldingsLtd. in the legal structure. If the transaction proceeds, we note that theMoser family will own all of the company excluding a continued smallnon-voting stake held by other members of the senior management team.
The CreditWatch reflects our view that if the transaction proceeds, Together'svery strong capital position could weaken, with the consolidated risk-adjustedcapital ratio potentially falling below the 15% threshold in our criteria.However, we expect that the ratio should remain above 10%, reflecting the high
starting point. We also believe that Together will continue to generatecapital through retained earnings. Therefore, on resolution of theCreditWatch, we expect any downgrade will likely be limited to one notch.