S&P gives New Era Cap loan BB-

S&P said it gave BB- issue and 2 recovery ratings to New Era Cap LLC’s planned $300 million first-lien term loan due 2027. The 2 recovery rating indicates an estimate for sustainable recovery (70% - 90%, rounded estimate: 85%) in default.

New Era Cap plans to use the loan and a planned $150 million asset-based lending credit facility due 2026 to refinance its debt and fund a dividend. The agency said it expects $50 million to be drawn on the ABL facility at close.

S&P also assigned a B+ issuer credit rating to New Era Cap, the group parent and borrower. “Our rating reflects the company's product concentration in the highly fragmented and discretionary headwear category, customer concentration, its high reliance on the U.S. major sports leagues licenses, and its limited track record operating at current profitability levels.”

The outlook is stable.

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