S&P rates SubCom loan B

S&P said it assigned its B issuer credit rating to Crown Subsea Communications Holding Inc. (SubCom). The outlook is stable.

At the same time, S&P assigned a B issue-level rating and 3 recovery rating to the company's proposed first-lien credit facility, which includes a $100 million revolving credit facility due 2023 and a $450 million first-lien term loan due 2025. The 3 recovery rating indicates an expectation for meaningful recovery (50%-70%; rounded estimate: 55%) in the event of a default.

“Our rating on SubCom reflects the company's participation in the subsea cable manufacturing, installation, and maintenance market, with a concentrated customer base, elevated debt leverage, and ownership by a private-equity sponsor,” S&P said in a news release.

“The ratings also incorporate our view that the company will benefit from increased capital spending by its customers in the subsea fiber optic cable market as demand increases due to strong growth in annual data traffic, supported by additional transoceanic cables.”

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