S&P rates CB Velocity loans B

S&P said it assigned a B corporate credit rating to CB Velocity Midco Inc.

The agency also said it assigned a B rating to the new $375 million first-lien credit facilities consisting of a $40 million senior secured revolving credit facility due in 2021 and $335 million first-lien term loan due in 2023 with a recovery rating of 3, indicating 50% to 70% expected default recovery.

The proposed borrower is Vestcom Parent Holdings Inc.

The outlook is stable.

Charlesbank Capital Partners announced it will acquire Vestcom International Inc.

The ratings on CB Velocity Midco reflect the company's significant debt burden and majority ownership by a financial sponsor, S&P explained.

The agency said it estimates pro forma debt-to-EBITDA ratio is in the high-6x range compared to 4.4x as of the last 12 months that ended Sept. 30.

The company has a narrow focus in printed shelf edge media in the grocery and drug channels, S&P said, and significant customer concentration.

The ratings also consider the company's leading position in the outsourced shelf-edge information and media solutions market, historically stable revenue streams, intellectual property protected technology and long-standing customer relationships, the agency said.

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