S&P affirms Distribution International

S&P said it affirmed its B corporate credit rating on Distribution International Inc. The outlook is stable.

At the same time, S&P affirmed its B issue-level rating on the company’s $215.5 million first-lien term loan due 2021 and CCC+ issue-level rating on the company’s $113 million second-lien term loan due 2022. S&P revised the recovery rating on the first-lien loan to 4 from 3, indicating an expectation of average (30% to 50%, lower half of the range) recovery in the event of a payment default. The recovery rating on the second-lien loan is unchanged at 6, indicating an expectation of negligible (0% to 10%) recovery in the event of a payment default.

The company also has a $110 million asset-based lending facility due 2019, which S&P does not rate.

“The stable rating outlook reflects our expectation that DI's leverage will remain between 7x and 8x for the next 12 months, a level consistent with our highly leveraged financial risk assessment,” said S&P credit analyst Vania Dimova in a news release.

“We expect DI to maintain adequate liquidity based on committed revolving borrowing capacity and minimal capital spending.”

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