S&P rates Travel Leaders loan B+

S&P said it revised its outlook on Travel Leaders Group LLC to negative from stable and affirmed the B+ issuer credit rating.

In addition, the agency assigned a B+ issue-level rating and 3 recovery rating to the company’s proposed senior secured term loan due 2024. The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 50%) recovery for lenders in the event of a payment default.

The agency also affirmed the B+ rating and 3 recovery rating on the company’s existing $25 million revolver due 2022.

“The negative outlook reflects our expectation that elevated costs and the incremental debt to fund the acquisition of Bonotel Exclusive Travel will result in leverage at or near our 5x downgrade threshold over the next two years,” S&P said in a news release.

“We expect TLG will remain acquisitive, and additional debt-funded acquisitions or cost overruns could cause our measure of total adjusted leverage to stay above 5x over the intermediate term.”

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