S&P ups Savage Enterprises

S&P said it raised the issuer credit rating on Savage Enterprises LLC to BB- from B+ and also raised it issue-level rating on the company's $885 million (outstanding) senior secured first-lien term loan maturing in 2025 to BB from B+ and revised the recovery rating to 2 from 3. The 2 recovery rating reflects the expectation of substantial (70%-90%; rounded estimate: 70%) recovery prospects in the event of a payment default.

Savage has agreed to sell a majority of its inland marine assets to Kirby Inc. for $278 million. The company will use the proceeds, which equals about 32% of reported debt, toward debt repayment. Kirby will also assume a portion of Savage's operating leases.

“We expect the company's pro forma S&P Global Ratings'-adjusted leverage to decline to 2.8x, compared with an estimated leverage of 3.7x as of December 2019,” said S&P in a press release.

The outlook is stable.

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