S&P rates Internet Brands loans B, CCC+

Standard & Poor’s said it assigned Micro Holding Corp. and MH Sub I LLC (Internet Brands) a corporate credit rating of B. The outlook is stable.

At the same time, S&P assigned the $75 million senior secured revolving credit facility due 2019 a B issue-level rating, with a recovery rating of 3, indicating an expectation for meaningful (50% to 70%) recovery of principal for debtholders in the event of default.

In addition, S&P assigned the $460 million senior secured term loan B and the $50 million delayed-draw term loan B due 2021 a B issue-level rating, with a recovery rating of 3 (50% to 70% recovery expectation).

Lastly, the agency assigned the $170 million second-lien loan due 2022 a CCC+ issue-level rating, with a recovery rating of 6, indicating an expectation for negligible (0% to 10%) recovery of principal for debtholders in the event of default.

“The B corporate credit rating reflects the company’s relatively small size and risks of continuous change in its businesses,” said S&P credit analyst Jawad Hussain in a news release. “It also reflects the company’s ‘highly leveraged’ financial risk profile, resulting from the increased debt in the capital structure due to the acquisition of the company by KKR.”

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