S&P gives Hyperion, loans B

S&P said it gave B ratings to Hyperion Materials & Technologies Inc. and its planned $390 million first-lien term loan and proposed $75 million revolver. The recovery rating on the loans is 3.

“Our rating on Hyperion reflects its high initial S&P Global Ratings-adjusted leverage and its exposure to cyclical end markets--such as construction, automotive, and oil and gas. Moreover, the company's scale is limited, and it lacks a significant aftermarket business, which typically generates higher margins. Conversely, the company's long-standing relationships with its blue chip customers and good customer and geographic diversity somewhat offset these weaknesses,” S&P said in a press release.

The agency said it forecasts reasonable deleveraging over the next 12 months given the strong outlook for many of Hyperion's customers. In 2020, the company's S&P Global Ratings-adjusted leverage was about 9.7x.

Loan proceeds will be used to refinance Hyperion’s debt.

The outlook is stable.

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