S&P rates Tank loan B-

S&P said it gave Tank Holding Corp.’s planned $240 million incremental first-lien term loan a B- rating with a 3 recovery rating.

The company plans to issue the $240 million first-lien term loan due 2026 and a $30 million second-lien term loan due 2027 (unrated).

“We believe the company will use the proceeds from these loans to pay a dividend to its financial sponsor, Olympus Partners, and acquire three small rotational molding manufacturers. We anticipate Tank's S&P-adjusted leverage will exceed 7x immediately following the close of the transaction and remain about 6.5x or higher over the next 12 months, which we view as consistent with a B- rating,” S&P said in a press release.

Concurrently, S&P revised the outlook to stable from negative and affirmed its ratings on Tank, including the B- issuer rating. “The stable outlook reflects our expectation that Tank will generate good free cash flow of about $50 million annually and reduce its leverage to the mid-6x area over the next 12 months,” the agency said.

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