S&P lifts Distribution view to positive

S&P said it affirmed the CCC+ issuer credit rating on Distribution International Inc.

The agency also said it revised the outlook to positive from stable, reflecting the possibility of an upgrade subject to completion of the acquisition, a record of sustained cash flow growth and interest coverage approaching 2x over the next 12 months.

Distribution International's cash flows will continue improve in the next 12 months because of organic growth and a pending undisclosed acquisition, S&P said.

The acquisition will be funded by new equity and a $25 million add-on to the second-lien term loan, which will be extended to 2024, the agency said.

The positive outlook reflects a view the company could be upgraded in the next 12 months if it integrates the acquisition and generates sustained levels of cash flows sufficient to cover its fixed charges, S&P said.

The outlook revision also considers the company's proposed refinancing, which pushes maturities and improves liquidity by adding $10 million in commitment to the asset-based lending facility, the agency said.

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