S&P: AI Alabama loans B, CCC+

Standard & Poor’s said it assigned a preliminary B long-term corporate credit rating to AI Alabama Midco BV (AI Alabama), prospective top holding company of Ammeraal Beltech Holding BV.

The agency also said it assigned a preliminary B rating and a preliminary 3 recovery rating to AI Alabama’s proposed €205 million first-lien term loan and €40 million revolving credit facility.

The recovery rating indicates expectations of meaningful recovery in the event of payment default, in the lower half of the 50%-70% range.

The agency also said it assigned a preliminary CCC+ rating and a preliminary 6 recovery rating to AI Alabama’s proposed €60 million second-lien term loan.

The recovery rating on these facilities reflects 0 to 10% expected default recovery.

Through AI Alabama, funds advised by Advent International Corp. will raise €265 million of drawn debt to finance the acquisition of Ammeraal Beltech, S&P said.

The preliminary B rating on AI Alabama reflects the group’s highly leveraged financial risk profile and weak business risk profile, the agency said.

Following the transaction, the group’s net debt-to-EBITDA ratio will be about 8.5x by year-end 2015, S&P said.

The ratings also consider AI Alabama’s weak business risk profile, reflecting the group’s limited size and scope, which results in inherently greater vulnerability to external changes, the agency said.

The company has a relatively small presence in emerging markets with about 10% of revenues generated outside of the Americas and Europe, S&P added.

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