S&P lifts Travelport, rates loan CCC-

S&P said it raised its ratings on Toro Private Holdings I Ltd. (Travelport) and its finance unit Travelport Finance (Luxembourg) Sarl to CCC+ from SD, selective default. The agency also assigned a CCC- rating to the new $2.085 billion junior priority-lien term loan due 2026.

Travelport completed the full exchange of its first-lien term loan for a $2.085 billion (including payment in kind (PIK) interest as of March 31, 2022) junior priority term loan. Sponsors also contributed $200 million of equity.

“We believe Travelport's capital structure remains unsustainable after the debt exchange due to a high debt burden,” S&P said in a statement.

That said, the agency sees Travelport’s S&P Global Ratings-adjusted EBITDA increasing to $240 million-$260 million in 2023 and $330 million-$350 million in 2024 compared with about $90 million in 2022.

“We forecast adjusted leverage will decline gradually based on improvement in the company's operating performance, but will remain high, above 10x over the next few years (17x-19x in 2023 and 13x-15x in 2024). In our base case, we forecast that Travelport's global distribution systems (GDS) booking fees (mostly for air travel) will recover to 75%-85% of 2019 levels in 2023, from 63% in 2022,” S&P said.

The outlook is negative.

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