S&P assigns Valvoline notes BB-

S&P said it assigned Valvoline Inc.’s planned $535 million of senior unsecured notes due 2031 a BB- rating. The notes’ recovery rating is 5, reflecting an expectation for modest (10%-30%; rounded estimate: 25%) recovery in default.

The proceeds and balance sheet cash will be used to repay Valvoline’s $800 million of senior unsecured notes due 2025.

S&P affirmed Valvoline’s BB issuer rating, BBB- issue-level rating on its senior secured bank credit facilities, with a 1 recovery rating, and BB- issue-level rating on its senior unsecured notes, with a 5 recovery rating.

The agency also revised the outlook to stable from negative. “The outlook revision reflects the company’s better-than-expected operating performance and our expectation for continued EBITDA growth in fiscal 2021. Valvoline’s business showed resilience during the pandemic and recovered quickly from the decline driven by Covid-19,” S&P said in a press release.

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