S&P lowers Fender loan to B

S&P said it lowered its issue-level rating on Fender Musical Instruments Corp.'s senior secured term loan that has been upsized by $25 million to $400 million to B from B+ and revised its recovery rating to 3 (50%-70%; rounded estimate: 65%) from 2 (70%-90%; rounded estimate 70%).

“The lower ratings reflect lower recovery prospects for the term loan given the increase in claims relative to our estimated valuation at emergence from default. The 3 recovery rating indicates our expectation of meaningful recovery in the event of a payment default,” S&P said in a press release.

The loan will be used for its acquisition of PreSonus Audio Electronics Inc., which is not rated. The company plans to use the extra $25 million to accelerate fixed-asset purchases.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.