S&P ups Flavors facilities to B+, B

Standard & Poor's said it raised its issue-level ratings on Flavors Holdings Inc.'s now proposed $400 million first-lien facility (which consists of a $50 million revolving credit facility due 2019 and $350 million first-lien term loan due 2020) to B+ from B.

The recovery rating was revised to 2 from 3, reflecting expectations for substantial (70% to 90%) recovery in the event of a payment default.

The agency also raised the issue-level rating on the company's now-proposed $50 million second-lien term loan due 2021 to B from B- and revised the recovery rating to 4 from 5, reflecting expectations for average (30% to 50%) recovery in the event of a payment default.

Proceeds will be used for the acquisition of Merisant Co. and to refinance existing debt at Mafco.

S&P said the changes reflect the company's revised first- and second-lien debt offering amounts. The first-lien loan amount was reduced by $15 million to $350 million and the second-lien term loan was reduced by $25 million to $50 million. The company's owner will contribute an additional $25 million and the company will draw about $21 million on its revolver.

The agency estimates the company's adjusted debt outstanding will be about $436 million versus the $450 million initially announced. It estimates pro forma leverage will be about 5.5 times, still in line with its prior expectations.

S&P also said the recovery and issue-level ratings were revised based on the lower debt levels and the change from 1% to 5% annual amortization on the first-lien term loan.

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