S&P rates Filtration loan B

S&P said it assigned B issue-level rating and 3 recovery ratings to Filtration Group Corp.'s expected $600 million incremental first-lien term loan. The 3 recovery rating indicates an expectation for meaningful recovery (50%-70%; rounded estimate: 50%) in default.

The company plans to use the proceeds to acquire Columbus Industries Inc., a provider of indoor air quality filters.

“The debt-financed acquisition will likely increase FGC's S&P Global Ratings-adjusted debt to EBITDA to about 8x in 2021. However, pro forma for the acquisitions of Columbus Industries and Molecular in April 2021 we believe debt leverage would be roughly 7x, below our 7.5x downside trigger. Furthermore, we believe the company will focus on integration and will reduce leverage to the mid-6x area in 2022 through EBITDA growth,” the agency said in a press release.

The outlook is stable.

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