S&P gives B+ to Interoute Finco loans

S&P said it assigned a B+ issue rating to Interoute Finco plc’s (B+/stable/--) proposed €250 million covenant-lite term loan B and Interoute Communications Ltd. (UK)'s proposed €75 million revolving credit facility. The recovery rating on this debt is 3, with recovery expectations in the lower half of the 50%-70% range.

The company intends to use the proceeds of the proposed term loan B to refinance its existing €240 million floating-rate notes. The proposed floaters will replace the company's super senior revolver. As a result, the existing €350 million senior secured notes, the proposed term loan B and the proposed revolver will share the same security package and will rank pari passu.

At the same time, S&P said it is affirming its B+ issue rating on the company's existing €350 million senior secured notes. The recovery rating remains unchanged at 4, reflecting recovery expectations in the higher half of the 30%-50% range.

At the close of the transaction, S&P expects to revise the recovery rating on these notes to 3 from 4, which is the same level as the proposed term loan B and revolver.

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