Renta Group guides €350M of FRNs at E+450 area

Renta Group Oy is out with price talk of E+450 area on its €350 million five-year secured bond offering. Books close today at 2:30 p.m. London time, with pricing expected to follow via global coordinator J.P. Morgan and Nordic coordinator Nordea.

The notes will be offered at par, have a 0% floor and will be callable at 101 after one year. Initial price thoughts were given on Jan. 26 at E+450-475, with the borrower having switched from an initially planned five-year fixed-rate bond with a two-year redemption.

Proceeds from the offering will fund an IK Partners-led buyout of the Nordic rental-equipment group, which was agreed in November 2021 for an enterprise value of €750 million. The takeover will be supported by €310 million of sponsor equity and a €75 million 4.5-year super-senior revolving credit facility, with proceeds from the financing also set to repay €200 million of existing Renta Group senior facilities.

Corporate and secured ratings have been confirmed at B/B2/B+, all stable. The transaction, to be issued via Ren10 Holding AB, is being marketed off pro forma adjusted EBITDA of €89 million for the 12 months ended September 2021 and net sales of €274 million for the same period.

In assigning its B rating, S&P Global Ratings said in a report published Jan. 25 that it forecasts revenue growth of roughly 4% to 7% for 2022 and adjusted debt to EBITDA of 3.9x-4.1x. However, the agency expects lower leverage of roughly 3.6x for 2023 and does not expect Renta Group to make sizable acquisitions in the next 12 months.

Ratings highlighted the firm's low geographical diversification compared with peers such as Loxam or Boels, with more than 95% of revenue stemming from the Nordic region. The agency also noted the company's cyclical end-markets, such as construction and industrials, as well as its high capital expenditure requirements.

Renta was founded in Finland in 2016 and operates across Sweden, Denmark, Norway and Poland.