S&P: Royal Holdings loans B, CCC+

Standard & Poor's said it assigned its B corporate credit rating to Royal Holdings Inc.

The outlook is stable.

At the same time, based on preliminary terms and conditions, the agency assigned a B issue-level rating (same as the corporate credit rating) and a recovery rating of 3 to the proposed $390 million first-lien senior secured facility under which the co-borrowers will be Royal Adhesive and Sealants LLC, ADCO Global Inc. and ADCO Products Inc.

The facility consists of a $40 million revolving credit facility due 2018 and a $350 million first-lien term loan due 2018.

S&P also assigned a CCC+ rating (two notches below the corporate credit rating) and a recovery rating of 6 to the $154 million second-lien term loan due 2019 for the same co-borrowers.

Royal plans to use the new credit facilities to acquire ADCO and refinance existing debt.

"The ratings on Royal reflect our assessment of its business risk profile as 'weak' and its financial risk profile as highly leveraged.' We assess its management and strategy as fair," S&P credit analyst Pranay Sonalkar said in a news release.

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