S&P rates Bingo, loans B

S&P said it assigned preliminary B ratings to Recycle and Resource Operations Pty Ltd. (Bingo Industries) and its planned term loan facilities.

Bingo plans to issue an A$825 million secured term-loan B to refinance its capital structure and partly fund its buyout by Macquarie Infrastructure and Real Assets. The capital structure will also include a A$100 million first lien delayed-draw facility and an A$75 million revolver facility.

“Bingo has a strong and well-established market presence in Sydney and a nascent market presence in Melbourne. In our opinion, Bingo's narrow end-market exposure exposes it to cyclical property and infrastructure volumes within the Sydney market. That said, we believe Bingo is well-positioned to benefit from favorable near-term industry dynamics. Moreover, we consider that the company's existing network of assets provides it with a strong platform to grow its presence in Melbourne and gradually expand its footprint across the east coast of Australia over the medium term,” S&P said in a press release.

Bingo's adjusted debt-to-EBITDA ratio post transaction will be about 8x, retreating to around 6x in fiscal 2022 (ending June 30, 2022) and below 5x in fiscal 2023, the agency estimates.

The outlook is stable, reflecting an expectation Bingo will maintain debt to EBITDA within a range of 5x to 6x over the medium term as the business grows its scale and geographic diversity, S&P said.

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