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S&P gives Radio Systems parent B
S&P said it assigned B ratings to the future parent of Radio Systems Corp., its senior secured facility and $625 million of senior secured notes. The notes have a 3 recovery rating.
CD&R Smokey Buyer Inc. will be the new reporting entity and the borrower on the $100 million asset-based lending facility that will be undrawn at close.
Notes proceeds will be used to help Clayton, Dubilier & Rice acquire the company and repay all its debt, including all outstanding preferred equity.
“ We estimate pro forma adjusted debt to EBITDA will decline to 6x from 7.2x as of March 31, 2020, as the new financing will take out debt-like preferred equity currently in the capital structure; but leverage could weaken in the near term if the economic downturn from the pandemic continues for a prolonged period,” S&P said in a press release.
The outlook is negative.
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