S&P upgrades Thermadyne

Standard & Poor's said it raised Thermadyne Holdings Corp.'s corporate credit rating to B from B- and assigned a B- rating to the company's proposed $250 million senior secured notes with a 5 recovery rating, indicating 10% to 30% recovery in a default.

When the company closes on the transaction, the agency said it will withdraw the ratings on the existing subordinated notes, which will be paid off with the proceeds of the new.

The outlook is positive.

The ratings reflect the company's highly leveraged financial risk profile following the proposed additional debt taken on in its recent recapitalization, S&P said.

Thermadyne is being acquired by Irving Place Capital and, although some additional debt will be taken on in the transaction, the company's good recent EBITDA performance sustains credit metrics that are still commensurate for the rating, the agency said.

The ratings also consider the company's weak, but improving, cash flow protection and limited financial flexibility, S&P said.

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