S&P rates Hoffmaster loans B+

Standard & Poor's said it assigned a B corporate credit rating to Hoffmaster Group Inc., along with a B+ rating and 2 recovery rating on its proposed $30 million revolving credit facility and $160 million first-lien term loan. This indicates an expectation for 70% to 90% recovery in the event of a default. The agency also said it assigned a CCC+ issue-level rating and 6 recovery rating to the proposed $90 million second-lien term loan, indicating an expectation for 0% to 10% recovery in the event of a default.

The outlook is stable.

The ratings reflect a weak business profile that incorporates its position as a niche player in disposable tableware products, with limited product and geographic diversity, moderate customer concentration and a limited operating track record, S&P said.

The financial risk profile is highly leveraged and future decisions regarding financial policy are likely to support substantial reliance on debt leverage, the agency said.

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