S&P rates Radiate loan B

S&P said it assigned a B rating and 3 recovery rating to Radiate Holdco LLC's planned $300 million incremental term loan B due 2024.

While this will result in modestly higher secured claims under a simulated default, the existing issue-level rating on the secured debt remains at B because secured lenders are expected to receive between 50% and 70% recovery in a default, consistent with a 3 recovery rating.

The proceeds will be used for a dividend to shareholders, S&P said.

The agency said it believes this debt-financed dividend is somewhat negative for the company's credit metrics, but is consistent with the financial policy employed by TPG Capital.

Following this transaction, S&P said it estimates that the company's adjusted leverage will increase to about 7x on a last-12-month basis, which is still lower than the downgrade trigger of 7.5x.

S&P said it believes this will more than offset the impact of low margin video customer erosion, resulting in EBITDA growth of 5% to 8% per year.

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