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S&P rates Digital River loans B, CCC
Standard & Poor’s said it assigned a preliminary B- corporate credit rating to Digital River Inc.
The agency also said it assigned a preliminary B rating and preliminary 2 recovery rating to the company’s proposed $10 million first-lien revolver maturing 2020 and $255 million first-lien term loan maturing 2021.
The 2 recovery rating indicates 70% to 90% expected default recovery.
S&P also said it assigned a preliminary CCC rating and preliminary 6 recovery rating to the company’s proposed $80 million second-lien term loan maturing 2022.
The 6 recovery rating indicates 0 to 10% expected default recovery.
The outlook is stable.
The ratings reflect the company’s relatively small scale and significant client concentration within the highly competitive and fragmented e-commerce solutions market, S&P said.
The ratings also consider the company’s pro forma leverage in the mid-6x range as of Dec. 31, which is expected to subside to the low- to mid-5x range by Dec. 31, 2015, the agency said.
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