S&P rates Rain Carbon loan BB, lowers notes

S&P said it affirmed its B+ corporate credit rating on Rain Carbon Inc. The outlook is stable.

At the same time, S&P said it assigned a BB long-term issue rating to the company's proposed €390 million first-lien senior secured term loan B and $150 million senior secured revolving facility. The recovery rating is 1, reflecting an expectation of substantial (90%-100%, rounded estimate: 95%) recovery in the event of default.

The proposed loan will be issued by Rain Carbon GmbH, a subsidiary of RCI, and guaranteed by RCI and its direct and indirect wholly owned U.S., Canadian, German, and Belgian subsidiaries, subject to customary exceptions.

S&P is also lowering its issue ratings on RCI's senior secured second-lien notes due 2025 to B from B+. These notes are guaranteed by the company and jointly issued by Rain CII Carbon LLC and CII Carbon Corp.

“Post the refinancing, we estimate the recovery ratings on these notes to be 5, reflecting an expectation of modest (10%-30%; rounded estimate: 15%) recovery in the event of default. Our recovery rating was 4 earlier,” S&P said in a news release.

U.S.-based RCI is a wholly owned subsidiary of India-listed Rain Industries Ltd.

“We affirmed the corporate credit rating on RCI to reflect our view that the company's leverage will improve over the next 12 months supported by good demand and benign prices of its key products calcined petroleum coke (CPC) and coal tar pitch (CTP),” S&P said.

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