S&P rates Energy Acquisition loan B-

S&P said it assigned its B- issue-level and 3 recovery ratings to Energy Acquisition Co. Inc.'s (subsidiary of Energy Holdings (Cayman) Ltd., ECI) proposed $100 million senior secured term loan B due June 2025. The 3 recovery rating indicates an expectation of meaningful (50%-70%; rounded estimate: 50%) recovery in default.

The company will use the proceeds, along with sponsor equity, to fund upcoming acquisitions.

“We expect these acquisitions to reduce leverage, given the equity contribution from the financial sponsor. These acquisitions will further broaden ECI's end-market exposure into the broader auto and various industrial end markets,” S&P said in a press release.

The B- issuer credit and revolver ratings, the CCC second-lien debt rating and negative outlook are unchanged, the agency said.

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