S&P rates Innovation Ventures loan BB, notes B-

S&P said it raised the corporate credit rating on Innovation Ventures LLC to B+ from B.

The agency also said it assigned a BB rating and 1 recovery rating to the company’s proposed $25 million revolving credit facility due 2020 and $500 million term loan due 2021. The recovery rating is 1, indicating 90% to 100% expected default recovery.

S&P also said it assigned a B- rating and 6 recovery rating to its proposed $400 million senior unsecured notes due 2021. The recovery rating is 6, indicating 0 to 10% expected default recovery.

Innovation Ventures and Innovation Ventures Finance Corp. are co-issuers of the senior unsecured debt.

The outlook is stable.

S&P said it will withdraw the existing ratings on the company's senior secured notes due 2019 after the transaction closes and the notes have been fully repaid.

The upgrade reflects a view that the sale of Innovation Ventures to Renew Group Private Ltd. only modestly increases Innovation Ventures' leverage to just more than 3x from less than 2x, the agency said, and provides better clarity on how the company will allocate its cash flows between owner distributions and debt repayment in the future.

The ratings reflect the company's narrow product line and reliance on a single brand, ongoing risk of legal actions and negative publicity related to its products, S&P said.

The ratings also consider the lack of governance controls, the agency said.

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