S&P rates Coinstar loans B, CCC+

S&P said it assigned a B corporate credit rating to Aspen Merger Sub Inc., which will become Coinstar LLC upon completion of an acquisition transaction.

Outerwall Inc. is being acquired by Apollo Global Management LLC for $1.7 billion, the agency explained.

Outerwall owns and operates DVD-rental Redbox and coin-counting service Coinstar. These companies will be split and operate independently after the acquisition closes, S&P said, and are financed separately.

The outlook is stable.

The agency also said it assigned a B rating and 3 recovery rating to the Aspen Merger's $610 million first-lien secured credit facility, which consists of a $75 million revolver due 2021 and $535 million first-lien term loan due 2023.

The 3 recovery rating indicates50% to 70% expected default recovery.

S&P also said it assigned a CCC+ rating and 6 recovery rating to the company's $135 million second-lien term loan due 2024. The 6 recovery rating indicates 0 to 10% expected default recovery.

The ratings reflect the company's participation in a concentrated industry that is highly dependent on host-retail partners and credit unions for revenues, the agency said.

Coinstar has a small revenue and EBITDA base and is burdened by a highly leveraged capital structure, S&P said.

Still, Coinstar has a sizable footprint, minimal regulatory risk and above-average margins, which support its stable operating performance, the agency said.

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