S&P rates Recorded Books loans B-

S&P said it assigned a B- issuer credit rating to Recorded Books Holdings Inc.

The outlook is stable.

The agency also said it assigned a B- rating and 3 recovery rating to the company's $335 million senior secured first-lien term loan and $30 million senior secured first-lien revolver credit facility.

The 3 recovery rating indicates 50% to 70% expected default recovery.

The rating reflects the company's significant client concentration, limited geographic diversification and small revenue base, S&P said.

This is somewhat offset by the company’s contracted revenue profile and meaningful recurring subscription revenue, the agency said.

The stable outlook reflects an expectation that the company's adjusted leverage will remain elevated at higher than 6x, but will gradually improve to the low- to mid-single-digit percentage as one-time costs associated with its acquisition roll off over the next 12 months, S&P said.

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