S&P affirms Authentic Brands loans

S&P said it affirmed its B issue-level rating on Authentic Brands Group LLC's existing first-lien term loan due 2024 following the announcement of a $250 million add-on and $90 million delayed-draw, increasing the facility size to $1.065 billion from $725 million.

The recovery rating remains 3, indicating an expectation for meaningful (50%-70%, rounded estimate 60%) recovery in the event of a default.

The agency affirmed the CCC+ issue-level rating on the company's existing second-lien term loan due 2025 following its proposed $50 million add-on and $20 million delayed draw, increasing the facility size to $340 million from $270 million.

The recovery rating remains 6, indicating negligible recovery (0%-10%, rounded estimates 0%).

Proceeds will be used to fund the acquisition of Nautica, as well as the intellectual property of two other brands for a total of $400 million.

“We believe the company is a good brand operator and has shown its ability to revitalize tired brands by strategically moving them into different distribution channels, and the recent acquisitions should benefit from the company's already established distribution channels and marketing capabilities,” the agency said in a news release.

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