S&P rates Endo loans B+

S&P said it assigned its B+ issue-level and 2 recovery ratings to the planned revolver maturing 2026, pushing out the maturity on a portion of the $1 billion revolver and the proposed $2.295 billion senior secured first-lien term loan due 2028 issued by Endo Luxembourg Finance Co. Sarl and Endo LLC. Parent Endo International plc and certain material wholly owned restricted subsidiaries will guarantee the loans.

The 2 recovery rating indicates an expectation for substantial (70%-90%; rounded estimate: 70%) recovery in default and is consistent with S&P’s ratings on the first-lien debt.

“We expect the company will use the term loan proceeds of the new term loan to partially repay the $3.3 billion first-lien term loan maturing 2024, in a leverage-neutral transaction,” the agency said in a press release.

The CCC+ issue-level and 6 recovery ratings on Endo’s second-lien and senior unsecured debt are unchanged.

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