S&P rates Spectrum facility B

S&P said it gave B issue and 3 recovery ratings to Spectrum Group Buyer Inc.’s planned $567 million credit facility, which will include a $60 million senior secured revolving credit facility, undrawn at close, and a $507 million senior secured term loan.

H.I.G. Capital will use Spectrum to acquire Pixelle Specialty Solutions LLC. The agency affirmed Pixelle’s B issuer rating.

“We expect the company's debt leverage to be around 4x by the end of 2022, consistent with where the company has held leverage over the last two years. Our economists forecast that U.S. GDP and consumer spending will increase by 3.2% and 3.3% in 2022, respectively, which we expect will support higher sales in the low single digits. However, we note the company will be owned by financial sponsor H.I.G. Capital following the close of the proposed transaction. We impute a higher level of risk for financial sponsor-owned companies given their predilection for undertaking,” S&P said in a press release.

The outlook is stable.

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