S&P puts Interline on watch

Standard & Poor's said it placed Interline Brands Inc.'s BB corporate credit rating on CreditWatch with negative implications.

The CreditWatch listing indicates the rating will likely be lowered following the completion of the agency's analysis.

The CreditWatch listing follows news that Interline entered into a definitive agreement to be acquired by affiliates of GS Capital Partners LP and P2 Capital Partners, LLC for $25.50 per share in cash in a transaction valued at $1.1 billion, including the assumption of debt, S&P said.

In an SEC filing, the company indicated that equity and debt financing commitments for the transaction have been obtained, including $369 million of equity contribution, a $250 million senior secured asset-based revolving credit facility, a $303 million senior unsecured bridge facility at the operating company and a $375 million senior unsecured bridge facility to be held at the holding company.

As a result, the agency said it believes total debt leverage is likely to be significantly higher than currently what exists, resulting in an increase in the current debt leverage of 4x and probably resulting in an overall weaker financial risk profile for Interline.

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