S&P revises ADS loan recovery rating

S&P said it affirmed its B+ issue-level rating on ADS Tactical Inc.'s smaller proposed term loan and revised the recovery rating to 3 from 4, indicating an expectation of meaningful (50%-70%; rounded estimate: 50%) recovery in default.

ADS sliced the loan size to $475 million from $700 million; however, with likely higher pricing, an increase in the amortization rate, the addition of a net leverage ratio covenant and the shortening of the maturity date to 2026 from 2028, the agency said.

The company is also reducing the planned dividend’s size to $100 million from $266 million and will be repaying less asset-based lending borrowings.

“While the lower debt amount improves leverage ratios, there is no change to our issuer credit rating or outlook. However, the smaller term loan does reduce the amount of first-lien debt, resulting in a higher recovery percentage,” S&P in a press release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.