S&P rates PSC Industrial loans BB-, CCC+

S&P said it affirmed PSC Industrial Outsourcing LP's B corporate credit rating.

The outlook is stable.

The agency also said it assigned a BB- rating and 1 recovery rating to the company's proposed $430 million senior secured first-lien term loan due 2024. The 1 recovery rating indicates 90% to 100% expected default recovery.

S&P also said it assigned a CCC+ rating and 6 recovery rating to the company's proposed $140 million second-lien term loan due 2025. The 6 recovery rating indicates 0 to 10% expected default recovery.

The borrower of the debt is PSC Industrial Holdings Corp.

The rating action is because PSC Industrial Outsourcing is acquiring competitor Aquilex Holdings LLC for about $488 million, the agency explained.

The B+ rating and 2 recovery rating on the existing $48 million of revolving facilities due 2019 and $185 million first-lien term loan due 2020 will be withdrawn once the transaction is complete and the facilities have been refinanced, S&P said.

The ratings reflect a view that the additional scale benefits and potential for better equipment utilization and procurement savings from the Aquilex acquisition will allow PSC to improve its credit measures during the next year, the agency said.

S&P said it expects PSC's trailing 12-month adjusted debt-to-EBITDA ratio will ease to roughly 5.5x by the quarter ended Dec. 31, 2018 from more than 8x at June 30, 2017.

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