S&P assigns Trace3, loan B

S&P said it assigned B ratings to Escape Velocity Holdings Inc. (Trace3 Inc.) and its expected $415 million senior secured first-lien term loan due 2028. The loan’s recovery rating is 3. The agency said it will not be rating the $135 million senior secured second-lien term loan due 2029.

Private equity firm American Securities LLC is buying Trace3 for about $855 million. It will use the two loans to help finance the deal.

“We are forecasting S&P Global Ratings-adjusted debt to EBITDA above 7x for 2021, which is elevated relative to the rating, but we expect improving credit measures over the next 18 months. Trace3 is well positioned in strong performing end market verticals with 60% of revenue coming from the health care, technology, and financial services segments, which have tended to outperform during economic downturns,” S&P said in a press release.

The outlook is stable.

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