S&P rates Dental Corp. loans B-, CCC

S&P said it assigned its B- corporate credit rating to Dental Corp. of Canada Inc. The outlook is stable.

The agency also assigned a B- issue-level rating to the company's first-lien credit facility, consisting of a $33 million revolving credit facility due 2023, a $500 million first-lien term loan due 2025 and a $125 million delayed-draw first-lien term loan due 2025.

The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in a default scenario.

S&P also assigned a CCC issue-level rating to the company's $200 million second-lien term loan due 2026 and $50 million delayed-draw second-lien term loan due 2026. The 6 recovery rating indicates an expectation for negligible (0%-10%; rounded estimate: 0%) recovery.

L Catterton is acquiring Dental Corp. in a transaction that will be funded by new first-lien and second-lien secured facilities, cash and rollover equity.

The agency said the ratings reflect Dental Corp.’s limited size, scale and scope of operation in an industry with limited barriers to entry, as well as its aggressive debt-funded expansion in the Canadian dental market.

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