Lion reaps €600m in Picard recap

Picard issued €428m in new senior notes with a 7.75% coupon, to mature in 2020,  and offered a €342m tap of the €480m floating rate note issued in August 2013, due to mature in 2019. Lion Capital has received a €602m dividend.

The refinancing resulted in an 88% increase of Picard's debt, causing the company's net leverage to increase from 5.2x in 2014 to an estimated 7.9x for 2015.

Rating agency Fitch said in a release that such a high re-leveraging could cause Picard's issuer default rating (IDR), which sat at B+ prior to the refinancing, to be downgraded by at least one notch.

Fitch stated it viewed Lion Capital's financial policy as "aggressive" and, as it led to higher leverage, will cause Picard's financial profile to sit more within the B- rating. However, it also pointed out that the company's free cash flow levels and strong business profile will help to balance its IDR.

BNP Paribas, Credit Suisse, Goldman Sachs, JP Morgan and Morgan Stanley acted as bookrunners for the bond issuance.

Previous funding
In August 2013, Picard issued a €480m floating rate note to refinance the remaining €500m senior debt package that was put in place at the time of Lion's buyout of the business in 2010.

Lion acquired Picard from BC Partners in August 2010, with the deal valued at €1.5bn. Around 65% of deal value was reported at the time to consist of debt supplied by Crédit Suisse, Morgan Stanley and Citigroup.

BC was said to have reaped 2x through the sale. It had bought the company from a syndicate including Astorg Partners and Montagu Private Equity in December 2004 for €1.3bn.

Company
Founded in 1973 and headquartered in Paris, Picard is a retailer of frozen food goods. It sells 1,100 products and operates 920 stores in France.

The company generated €1.4bn in revenues and recorded an EBITDA of €182m for the year ending in September 2014.

People
Philippe Pauze is the CEO of Picard.

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• Topics
• Restructuring
• France
• Consumer
• France
• Lion Capital
• Refinancing