S&P rates First American Payment loan B

S&P said it assigned a B with a recovery rating of 3 to First American Payment Systems LP’s planned $275 million first-lien term loan due 2027 to fully refinance its $189 million first-lien term loan due 2024 and $80 million second-lien term loan due 2024.

The agency removed all its First American ratings from CreditWatch with negative implications and affirmed its B issuer credit rating.

“The affirmation reflects our expectation that the company will complete its refinancing and maintain an ample cushion under the covenant on its new credit facilities. The proposed facilities will contain a 6.75x maximum senior secured net leverage ratio covenant, which will provide it with ample cushion. We also expect the company to realize more than $3 million of annual interest expense savings from the elimination of the second lien term loan upon completion of the refinancing,” said S&P in a press release.

The outlook is stable.

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