S&P rates AI Alpine AT BidCo loans B, CCC+

S&P said it assigned its preliminary B long-term issuer credit rating to Al Alpine AT BidCo GmbH. The outlook is stable.

At the same time, the agency assigned a preliminary B issue rating with a 3 recovery rating to the proposed senior secured term loan B and revolving credit facility. This indicates an expectation of meaningful (50%-70%; rounded estimate 50%) recovery in the event of payment default.

S&P assigned a CCC+ issue rating, with a 6 recovery rating to the second lien-term loan B. This indicates an expectation of 0%-10% recovery in the event of default.

“Our rating of Alpine is constrained by its highly leveraged capital structure after the deal closes. We also note Alpine's exposure to the cyclical oil and gas (O&G) end markets through its Waukesha business (around 20% of fiscal year 2017 revenues), limited application diversification compared with larger more established incumbents, a reliance on factoring for working capital requirements, and revenues concentrated geographically (in Europe and North America),” S&P said in a news release.

“These factors are partly mitigated by Alpine's healthy S&P Global Ratings-adjusted margins (approaching above average for capital goods manufacturers) and favorable trends in the Distributed Power (DP) sector.”

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