S&P ups USF, rates loan B

S&P said it upgraded USF Holdings LLC to B from CCC and assigned B and 3 recovery ratings to its planned $308 million first-lien term loan. USF also plans to secure a $175 million second-lien loan the agency will not rate.

“We are raising our rating on USF based on the company’s proposed refinancing, which extends upcoming debt maturities and raises covenant headroom. We anticipate the company will use proceeds from the proposed refinancing to repay its existing term loan B in a leverage-neutral transaction, and has established a second receivables factoring facility for additional liquidity. The transaction extends the company’s debt maturities by about three years and raises the maximum leverage covenant terms, providing ample headroom over the next 12 months,” the agency said in a press release.

S&P said it intends to remove the rating on the $580 million term loan once it is repaid.

The outlook is negative.

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