S&P rates Authentic Brands loans B, CCC+

S&P said it affirmed the B corporate credit rating on Authentic Brands Group LLC.

The outlook is stable.

S&P also said it assigned a B rating to the company's proposed first-lien credit facility, including a $75 million revolver due in 2022 and $685 million term loan due in 2024.

The recovery rating is 3, indicating 50% to 70% expected default recovery.

S&P also said it assigned a CCC+ rating to the proposed $310 million second-lien term loan due 2025. The recovery rating is 6, indicating 0 to 10% expected default recovery.

The agency said it expects to withdraw the B+ rating and 2 recovery rating on the company's existing first-lien credit facility, along with the CCC+ rating and 6 recovery rating on its existing second-lien term loan following the completion of the transaction as these credit facilities are expected to be repaid in full at that time.

The ratings reflect an expectation that the company will continue to generate healthy cash flow and leverage will decline to the mid-5x range next year, S&P said.

The agency said it continues to expect the company's financial policy to be aggressive, including further debt-financed acquisitions and shareholder returns and expect leverage to be about 6x.

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