S&P rates Duff & Phelps second-lien loan CCC

S&P said it assigned its CCC issue-level and 6 recovery ratings to Duff & Phelps Holdings Corp.'s privately placed $450 million second-lien senior secured term loan. The 6 recovery rating indicates an expectation of negligible (0%-10%; rounded estimate: 5%) recovery of principal in the event of a payment default.

Duff & Phelps used the proceeds from this transaction, along with a $1.55 billion dual-currency term loan and about $2.3 billion of common equity, to fund its leveraged buyout by a group of financial sponsors led by Stone Point Capital LLC, Further Global Capital Management LP and Permira.

The company’s privately placed second-lien term loan replaced the previously proposed issuance of senior notes.

“Our B- issuer credit rating and stable outlook reflect our expectation that Duff & Phelps will continue to steadily increase its organic revenue by the low- to mid-single-digit percent area while benefiting from operational initiatives that expand its EBITDA margins over the next 12 months,” S&P said in a news release. “We expect the company to maintain adequate liquidity despite its substantial debt burden.”

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