S&P rates Zest B, facilities B, CCC+

S&P said it assigned its B issuer credit rating to Charger Acquisition Corp. (Zest Dental Solutions).

The outlook is negative.

At the same time, the agency assigned its B issue-level rating to the company's $315 million senior secured credit facility, consisting of a $50 million revolving credit facility and $265 million first-lien term loan. The recovery rating is 3, indicating an expectation of meaningful recovery (50%-70%; rounded estimate: 60%).

S&P also assigned a CCC+ issue-level rating to the company's $115 million second-lien term debt. The recovery rating is 6, indicating an expectation of negligible recovery (rounded estimate: 0%).

“There is considerable uncertainty about the company's earnings once the company's Locator product expires in the U.S. later this year; this product represents about 70% of the company's revenues,” the agency said in a news release.

“While the company recently began selling its next-generation product, we believe that potential competition could erode its leading market position for this product category, resulting in revenue, profitability, and cash flow declines materially beyond our base-case forecasts.”

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