S&P rates Turning Point facilities BB, B

S&P said it assigned its BB issue-level ratings Turning Point Brands Inc.’s five-year $50 million senior secured revolving credit facility and five-year $160 million senior secured first-lien term loan.

The agency also assigned its B issue-level rating to the company's six-year $40 million senior secured second-lien term loan.

The 1 recovery rating on the revolver and first-lien term loan indicates an expectation that lenders could expect very high (90% to 100%, rounded estimate: 95%) recovery in the event of a payment default. The 5 recovery rating on the second-lien term loan indicates an expectation for modest (10% to 30%, rounded estimate: 25%) recovery.

The company used the proceeds from the term loans to refinance its existing debt.

The B+ corporate credit rating remains and the outlook is stable.

The agency said the ratings reflect the company’s limited scale, narrow business focus, and weak position in intensely competitive subsegments of the other-tobacco-products industry.

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