S&P lowers Fender, rates loan B+

S&P said it lowered its issuer credit rating on Fender Musical Instruments Corp. to B from B+.

The outlook is stable.

At the same time, the agency assigned a B+ issue-level and 2 recovery rating to the company's proposed senior secured term loan due in 2025, reflecting an expectation that lenders would receive substantial (70%-90%; rounded estimate: 70%) recovery in the event of a payment default.

Fender intends to use the proceeds to repay its existing debt, to pay fees and expenses, and to fund a $105 million dividend to its owners.

“The downgrade to B from B+ reflects higher expected leverage as a result of the proposed term loan to fund a dividend to Fender's owners, and our belief that Fender may use future leverage capacity to fund additional dividends on occasion,” S&P said in a news release.

© 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.