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S&P rates Rent-A-Center loan BB-
S&P said it rated Rent-A-Center Inc.’s (RCII) planned $575 million term loan B facility BB- with a recovery rating of 3. S&P also affirmed Rent-A-Center’s BB- issuer rating.
Rent-A-Center will use the proceeds to refinance its capital structure and add new debt to help fund the acquisition of Acima.
“The transaction does re-lever the company materially, but we believe there is sufficient room in RCII’s credit metrics after years of deleveraging. Rent-a-Center’s last-12-month (LTM) S&P Global Ratings'-lease-adjusted leverage through Sept. 30, 2020, strengthened to 1.5x from 2.2x in the year-ago period. The $1.65 billion Acima purchase will be funded with a mix of new secured and unsecured debt totaling $1.325 billion, stock consideration, a modest draw on the revolver, and cash on hand. RCII also plans to refinance its roughly $200 million term loan due 2026 through the transaction,” the agency said in a press release.
The outlook is stable.
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