Fitch assigns RS Ivy, loan BB

Fitch Ratings said it assigned RS Ivy Holdco, Inc. a long-term issuer default rating of BB and a senior secured rating of BB/RR4 to its proposed $450 million senior secured term loan.

“The ratings reflect the structural subordination of RS Ivy’s proposed term loan to total outstanding debt of $1.1 billion total at ITT Holdings, LLC (ITT; BBB-/RWN). Concerns include cash flow concentration derived solely from ITT and no other assets. ITT is a provider of bulk storage terminals across North America with a competitive advantage from strategically located facilities. ITT has agreed to be acquired by affiliates of Riverstone Holdings LLC and upon closing of the transaction, Fitch expects to downgrade ITT’s rating one notch to BB+/RR4.

The outlook is stable. The outlook reflects the view that ITT’s operations should provide steady cash flows over the forecast period, and pay dividends that are adequate to service RS Ivy’s proposed term loan and maintain the minimum debt-service coverage ratio of 1.1x, Fitch said.

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