S&P assigns Truist loans B, CCC+

S&P said it assigned B issue-level and 3 recovery ratings to Truist Insurance Holdings LLC’s planned first-lien $1.175 billion revolver, undrawn at close, and $4 billion term loan and CCC+ issue and 6 (0%) recovery ratings to the planned $1.9 billion second-lien term loan.

The agency said it also assigned B ratings to the issuer and its parent Panther Platform Midco LP with a stable outlook.

The loans are being issued in connection with TIH’s spinoff from Truist Financial Corp., which is selling its remaining ownership interest to Stone Point Capital, Clayton Dubilier & Rice and other investors.

“Our rating reflects TIH's narrow focus on the highly fragmented and competitive U.S. insurance brokerage industry, in which it has a longstanding and established competitive position. As the fifth-largest U.S. insurance broker with about $3.5 billion of revenue in 2023, TIH has a market-leading presence and scaled capabilities across the insurance distribution value chain,” S&P said in a press release.

However, the agency noted that TIH’s estimated leverage of 8.5x and EBITDA interest coverage of 1.3x at close, including new senior secured financing to launch during the loan syndication period, constrain the rating.

“Our base case forecasts organic revenue growth in the mid-to-high single-digits and S&P Global Ratings-adjusted EBITDA margin improving from about 28% in 2023 to 30% in 2025, driven by continued secular tailwinds, successful realization of ongoing cost saving initiatives, and overall improved scaling as a stand-alone entity,” S&P said.

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