S&P rates EWT facility B+

S&P said it assigned EWT Holdings III Corp.'s planned first-lien credit facility consisting of a $250 million revolving credit facility, estimated to be roughly $50 million drawn at close, and a $560 million term loan B+ and 3 recovery ratings. The 3 recovery rating indicates an expectation for meaningful recovery (50%-70%; rounded estimate: 50%) in default.

EWT Holdings is a subsidiary Evoqua Water Technologies Corp. Evoqua also plans to put in place, through a subsidiary, an unrated $150 million receivables financing facility.

Proceeds and about $60 million of cash are expected to be used to repay its $817 million of term loans outstanding.

“Although the proposed transaction would modestly lower S&P Global Ratings-adjusted debt leverage by about 0.2x-0.3x, we continue to forecast that free operating cash flow to debt will remain below our upgrade trigger of 10% over the next 12 months. Therefore, our B+ issuer credit rating and stable outlook remain unchanged,” S&P said in a press release.

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