S&P rates TriNet loan BB

S&P said it assigned a BB rating to TriNet HR Corp.'s proposed $135 million term loan A-2 due 2019.

The recovery rating is 1, indicating 90% to 100% expected default recovery.

The proceeds will be used to refinance its existing $200 million term loan B due in 2017.

TriNet HR is a wholly owned subsidiary of TriNet Group Inc., S&P said.

The offering will be leverage neutral and TriNet will have roughly $500 million in reported debt outstanding, the agency said.

S&P said it estimates that for the 12-month ended March 31, the company's adjusted debt-to-EBITDA was about 3.8x.

The agency said it expects the company will maintain debt leverage at less than 4x during the next 12- to 24-months due to continued growth in the professional services business and good cash flow generation, given the increase in the outsourcing trend of non-core business functions.

TriNet reflect the company's narrow product focus in the highly competitive and fragmented professional employer organization (PEO) industry, lack of scale and limited geographical diversity, S&P said.

The company has a solid market position within the small- to medium-size business segment of the PEO industry, but competes against companies that are larger and have more financial wherewithal, the agency said.

S&P said it believes TriNet is an effective competitor in this space and has grown both organically and through acquisitions to more than 12,000 clients spread across several verticals.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.