S&P rates Pretium loans B, CCC+

S&P said it assigned the planned first-lien facilities of Poseidon Investment Intermediate LP (Pretium Packaging LLC) a B rating and a CCC+ rating to the second-lien term loan.

Pretium plans to raise a $530 million first-lien term due 2027 and a $170 million second-lien term loan due 2028. The recovery ratings are 3 and 6, respectively.

Proceeds will be used to refinance Pretium’s capital structure and fund a shareholder distribution to its financial sponsor, Clearlake Capital Group LP.

S&P also assigned Pretium a B rating. “We believe Pretium is well suited to capitalize on shifting consumer preferences and behavioral changes given its leading position in niche applications within the North American plastic packaging industry. For the fiscal year ended Sept. 30, 2020, sales increased 18.9% to $473 million driven by contributions from recent acquisitions and volume growth across its food and specialty beverage and household and commercial chemical end markets,” the agency said in a press release.

The outlook is stable. The outlook reflects the expectation for improving operating performance as the company benefits from demand tailwinds related to the pandemic and earnings growth from previous strategic initiatives. “We forecast S&P Global Ratings-adjusted debt to EBITDA, although elevated near 7x in fiscal 2020, will decline to the mid-6x area by the end of fiscal 2021,” the agency said.

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