S&P gives Chamberlain loans, B, CCC+

S&P said it gave the Chamberlain Group LLC and its planned $1.925 billion first-lien term loan B ratings. The agency also assigned a CCC+ rating to the group’s planned $600 million second-lien term loan. The recovery rating on the first-lien loan is 3 and 6 on the second-lien loan.

Blackstone will use the loans and equity to acquire Chamberlain. The group also plans to obtain an unrated $250 million revolver expected to be undrawn at close.

“We expect debt to EBITDA to increase to over 8x in 2021, compared with just above 1.5x in 2020, with debt increasing by about 600%. This significant jump is attributable to the leveraged buyout proposed by private equity firm Blackstone,” S&P said in a press release.

The agency said it forecasts Chamberlain to produce $200 million-$250 million in adjusted operating cash flow over the next 12 months on the back of sustained earnings and working capital management.

The outlook is stable.

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