S&P rates Hillman Solutions B

S&P said it assigned a B issuer credit rating to Hillman Solutions Corp., the new public parent of the Hillman Cos. Inc. and subsequently withdrew its Hillman Cos. ratings because it moved the ratings to the parent. Before withdrawing the ratings, S&P upgraded the Hillman Cos.’s issuer rating to B from B-.

Hillman Solutions combined with a special-purpose acquisition company Landcadia Holdings III Inc. Hillman will employ roughly $775 million in equity proceeds to cut net debt and redeem its trust preferred securities, resulting in its adjusted leverage declining to about 4.8x from 7.6x for the 12 months ended March 27. S&P said the upgrade reflects the improved metrics.

The agency said it resolved the CreditWatch and raised the issuer credit rating on the borrower of the company's debt, the Hillman Group Inc. to B from B-. S&P also resolved the CreditWatch and raised the rating on the Hillman Cos. Inc.

S&P concurrently assigned a B+ issue-level rating on the senior secured debt with a 2 recovery rating indicating an expectation for substantial recovery (70%-90%; rounded estimate: 80%) in default and withdrew the B- issue level rating on the existing senior secured debt and the CCC issue level rating on the senior unsecured debt due to repayment.

The outlook is stable.

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