S&P rates MTL loan BB-

Standard & Poor’s said it affirmed the B+ corporate credit rating on MTL Publishing LLC.

The agency also said assigned a BB- rating and 2 recovery rating to the company’s proposed first-lien senior secured credit facility, which consists of a $1.12 billion term loan due 2022 and a $50 million revolving credit facility due 2020, which will be undrawn at closing.

The 2 recovery rating reflects 70% to 90% expected default recovery.

The outlook remains stable.

The proceeds will be used to refinance the existing term loan and fund a $100 million special dividend to its owners, S&P said.

The company also will commit $80 million of the proceeds to partially prepay the term loan or the existing senior unsecured notes within 12 months following the transaction, the agency said.

The ratings reflect a view that MTL will continue to generate consistent and predictable cash flows, adjusted debt leverage will remain at more than 6x and free operating cash flow-to-debt will remain at more than 5% over the next 12- to 18-months, the agency said.

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