S&P rates Bauer Performance, loan B+

Standard & Poor's said it assigned its B+ corporate credit rating to Bauer Performance Sports Ltd.

The outlook is stable.

At the same time the agency assigned its B+ issue-level rating to Bauer Performance's proposed $450 million term loan B due 2021. The recovery rating is 4, reflecting expectations for average (30% to 50%) recovery in the event of a payment default.

The company is also issuing a $200 million asset-based lending facility (unrated), which is expected to have a moderate amount drawn at close.

Bauer Performance will use the proceeds from these facilities to acquire the Easton baseball and softball business from Easton-Bell Sports Inc. for $330 million and to refinance its own existing credit facilities.

The amount of adjusted debt outstanding expected at the close of the transaction is about $520 million.

"The B+ corporate credit rating on BPS reflects our assessment of the company's 'aggressive' financial risk profile and 'weak' business risk profile. Although pro forma debt leverage of just over 5x (including our standard adjustments for pension and operating leases) is slightly weaker than indicative ratios for the 'aggressive' descriptor, we believe the company will grow its EBITDA base and apply a portion of its free cash flows toward debt repayment to be within those ratios," S&P credit analyst Stephanie Harter said in a news release.

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