S&P gives Inspired Education add-on B

S&P said it assigned B issue and 3 recovery ratings to Inspired Education Holdings Ltd.'s proposed €80 million add-on to its €715 million senior secured term loan, also rated B with a 3 recovery rating, due May 2026.

Financing subsidiary, Inspired Finco Ltd. will issue the loan. The 3 recovery rating indicates our expectation of meaningful recovery (50%-70%; rounded estimate: 50%) in the event of a payment default.

“Effectively, the proceeds will fund Inspired's £70 million acquisition of Wey Education. Although this entirely debt-financed transaction will cause a spike in leverage, the effect will be largely mitigated by the group's above-budget trading performance in the first three quarters of the 2021 financial year. While the group's ancillary revenue still lags our forecast because of the various restrictions imposed by the government in light of the pandemic, overall, enrollment levels are almost back to pre-pandemic levels,” the agency said in a press release.

The outlook is stable.

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