S&P assigns B- to ADMI loans

S&P said it assigned B- issue-level and 3 recovery ratings to ADMI Corp.’s (The Aspen Group or TAG) planned senior secured term loan B-5 and extended revolving credit facility. The agency also revised TAG’s outlook to stable from negative and affirmed its B- issuer rating.

Concurrently S&P said it revised the recovery ratings on the company's other first-lien loans due 2027 to 3 (rounded estimate: 50%) from 4 (rounded estimate: 45%) to reflect higher recovery expectations resulting from growth investments funded by equity added in the transaction.

“The successful extension of the company's maturities removes near-term refinancing risk. TAG's transaction extends maturities on its first-lien debt and RCF by more than two-and-a-half years to December 2027 and December 2028, respectively. In addition to the transaction, the company's financial sponsors will be adding about $450 million in the form of payment-in-kind (PIK) preferred equity, which we do not include in adjusted debt because it has credit-protective terms and creates an alignment of incentives for the holder of the preferred to act as an equity holder rather than a creditor,” the agency said in a press release.

The improved outlook reflects a forecast for TAG to deliver positive reported free operating cash flow (FOCF) excluding de novo capital expenditure (capex) in 2024, S&P said.

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