S&P rates PSC Industrial loans B+, CCC+

Standard & Poor's said it assigned its B corporate credit rating to PSC Industrial Outsourcing LP.

The outlook is stable.

At the same time, based on preliminary terms and conditions, the agency assigned a B+ issue-level rating (one notch above the corporate credit rating) and a recovery rating of 2 to the proposed $220 million first-lien senior secured facilities, which consist of a $40 million revolving facility due 2019 and a $180 million term loan due 2020. The 2 recovery rating indicates an expectation of substantial (70% to 90%) recovery in the event of payment default.

S&P also assigned a CCC+ issue-level rating (two notches below the corporate credit rating) and a recovery rating of 6 to the proposed $45 million second-lien term loan due 2021. The 6 recovery rating indicates an expectation of negligible (0% to 10%) recovery in the event of payment default.

PSC plans to use the new credit facilities to fund its acquisition by new equity sponsor Littlejohn & Co. LLC and for fees and expenses.

"The rating on PSC reflects our assessment of its business risk profile as 'weak' and its financial risk profile as 'highly leveraged,'" S&P credit analyst James Siahaan said in a news release. "We assess its management and strategy as 'fair.'"

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