S&P gives B to USI loan

S&P Global Ratings today assigned its B debt rating to USI Inc.'s planned $600 million first-lien term loan due 2030. The agency also assigned a 3 recovery rating, indicating meaningful (50%-70%; rounded estimate: 50%) recovery in default.

“We currently rate USI's $677 million term loan B and $2.48 billion first-lien term loan B-2 B, with recovery ratings of 3 (50%). Additionally, we currently rate USI's $615 million senior notes due 2025 CCC+, with a recovery rating of 6 (0%),” the agency said in a press release.

USI will use the incremental debt in conjunction with an additional investment commitment of more than $1 billion of equity from long-time majority financial sponsor KKR. USI and KKR plan to buy more than 50% of the USI shares held by longstanding minority owner, Caisse de depot et placement du Quebec and the shares held by other co-investors.

“Including this transaction, USI's S&P Global Ratings-adjusted leverage for the 12 months ended June 30, 2023, was 7x, up from 6.1x before the transaction, but well within rating bounds,” the agency.

The outlook is stable.

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