S&P rates VetCor facilities B, CCC+

S&P said it assigned its B corporate credit rating to VetCor Acquisition LLC. The outlook is stable.

At the same time, the agency assigned B issue-level and 3 recovery ratings to the proposed first-lien facility consisting of a $50 million revolver, a $450 million first-lien term loan and a $95 million first-lien delayed-draw term loan.

The 3 recovery rating reflects an expectation for meaningful recovery (50%-70%; rounded estimate: 55%) in the event of a payment default.

In addition, S&P assigned CCC+ issue-level and 6 recovery ratings to the proposed second-lien facility, consisting of a $195 million second-lien term loan and a $40 million second-lien delayed-draw term loan. The 6 recovery rating reflects negligible recovery (0%-10%; rounded estimate: 0%).

Oak Hill Capital Management is acquiring VetCor Acquisition in a $1.53 billion transaction.

“Our B corporate credit rating on VetCor reflects the company's solid market position in the attractive but niche and highly fragmented veterinary services industry,” the agency said in a news release.

“However, VetCor lacks diversity and scale compared to the top players in the market.”

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