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S&P rates new Armacell loans B, CCC+
Standard & Poor’s said it assigned a B corporate credit rating to Luxembourg Investment Company 1 Sarl, the new holding company of Armacell.
The outlook is stable.
The agency also said it assigned a B rating with recovery rating of 4 to Armacell’s proposed €445 million first-lien facility and proposed €100 million revolving credit facility. The 4 recovery rating indicates 30% to 50% expected default recovery.
S&P also said it assigned a CCC+ rating to Armacell’s proposed €115 million second-lien debt. The recovery rating of 6 indicates negligible recovery.
Both of the proposed issuances will be issued by Luxembourg Investment, which also was assigned a B long-term corporate credit rating.
S&P also said it affirmed the existing B long-term corporate credit on Armacell International SA and removed it and all of the existing issue ratings on the company from CreditWatch with negative implications where they were placed in December.
The outlook is stable.
S&P also said it affirmed the B rating on Armacell International’s existing first-lien debt. The recovery rating remains unchanged at 3, indicating 50% to 70% expected default recovery.
The agency also said it affirmed the CCC+ rating on its existing second-lien debt. The recovery rating remains at 6, indicating 0 to 10% expected default recovery.
S&P also affirmed Armacell’s B corporate credit and issue ratings.
Blackstone and Kirkbi plan to buy Armacell from Charterhouse for an undisclosed amount and finance the transaction with €445 million of first-lien debt and €115 million of second-lien debt.
S&P said it forecasted the company’s adjusted debt-to-EBITDA ratio will be less than 6.5x as a result of the pending acquisition and non-common equity financing.
The stable outlook reflects a forecast of positive, yet modest free cash flow for the company in coming years and adjusted debt-to-EBITDA of about 6x, S&P said.
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