S&P gives Red Ventures loan BB-

S&P said it gave BB- issue and 3 recovery ratings to Red Ventures LLC’s and New Imagitas Inc.'s planned $850 million senior secured term loan B due 2030. The 3 recovery rating indicates meaningful (50%-70%; rounded estimate: 65%) recovery in default. The co-issuers are subsidiaries of Red Ventures Holdco LP.

“All our existing ratings on Red Ventures, including our BB- issuer credit rating and stable outlook, are unchanged,” S&P said in a press release.

Red Ventures will use the proceeds alongside expected borrowings on its recently upsized $1.02 billion revolving credit facility with $272 million outstanding to refinance its $1.22 billion outstanding senior secured term loan due 2024.

“The term loan refinancing is leverage neutral. We expect Red Ventures' S&P Global Ratings' adjusted leverage to decline to 2.6x-2.8x by the end 2023 from our expectations of 3.5x-3.7x in 2022, as recent cost reductions will offset revenue softness caused by macroeconomic weakness over the next 12 months,” the agency said.

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