S&P lowers Acosta

S&P said it lowered its corporate credit rating on Acosta Inc. to CCC+ from B-. The outlook is negative.

At the same time, S&P lowered its issue-level rating on the company's senior secured bank credit facility, consisting of a $225 million revolving credit facility due 2019 and $2.065 billion term loan due 2021, to CCC+ from B-. The 3 recovery rating remains unchanged, indicating an expectation for meaningful (50%-70% range, rounded estimate 60%) recovery in the event of default.

S&P also lowered the issue-level rating on the $800 million senior unsecured notes due 2022 to CCC- from CCC. The 6 recovery rating remains unchanged, indicating an expectation for negligible (0%-10%, rounded estimate 0%) recovery in the event of payment default.

“The downgrade reflects Acosta' continued underperformance in recent quarters and very high leverage (approaching 12x). We now expect the company to maintain leverage around this area through fiscal 2018 and 2019, which, absent a favorable change in conditions, indicates that Acosta's financial commitments are unsustainable in the long term,” S&P said in a news release.

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