S&P rates Zep loans B+

Standard & Poor’s said it assigned its B corporate credit rating to Zep Inc. The outlook is stable.

S&P assigned a B+ issue-level rating and 2 recovery rating to the company’s proposed first-lien debt consisting of a $360 million secured term loan B and a $42.5 million revolving credit facility. The 2 recovery rating indicates an expectation of substantial (lower half of the 70%-90% range) recovery in the event of payment default.

“The stable outlook for Zep Inc. reflects our view that margins, albeit low, will be consistent, benefitting from a diverse product offering, strong brand, and established customer base. We do not factor in meaningful debt-funded acquisitions or shareholder rewards in our rating,” said S&P credit analyst Sebastian Pinto-Tomaz in a news release.

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