S&P rates Rising Tide B-, loans B-, CCC

S&P said it rated Rising Tide Holdings Inc. and its planned first-lien $385 million first-lien term loan due 2028 B-. The loan’s recovery rating is 3. The agency also rated its proposed $120 million second-lien term loan due 2029 CCC with a 6 recovery rating.

L Catterton plans to acquire Rising Tide, the parent of West Marine, using equity and the proceeds from the loans.

“The rating reflects high leverage and the company's limited scope of operations. We project Rising Tide Holdings' S&P Global Ratings-adjusted leverage will improve to slightly below 6x in 2021 following the acquisition. Organic profit growth will continue this year as marine aftermarket demand continues to increase. We expect that to follow solid improvement in 2020 as marine-related spending proved resilient through the Covid-19 pandemic and cost controls enhanced margins,” the agency said in a press release.

The outlook is stable.

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