S&P rates WWEX UNI TopCo B-

S&P said it gave B- ratings to WWEX UNI TopCo Holdings LLC and its planned $1.275 billion first-lien term loan due 2026. The agency also assigned a CCC rating to the company’s planned $300 million second-lien term loan due 2028. The first-lien debt’s recovery rating is 3, indicating meaningful (50%-70%; rounded estimate: 55%) recovery in default and the second-lien loan’s recovery rating is 6, indicating negligible (0%-10%; rounded estimate: 0%) recovery in default.

WWEX UNI plans to acquire GlobalTranz Enterprises LLC. “We assume WWEX will maintain stable profitability following the acquisition. We forecast EBITDA margins will remain stable in the high-single-digit percent area over the next several years. This is somewhat of a decrease from WWEX margins on a stand-alone basis, due to the increase in freight transportation logistics pro forma for the acquisition, and susceptibility to spot market prices,” S&P said in a press release.

In 2021, pro forma for the transaction, S&P said it sees debt to EBITDA of about 7x and FFO to debt of about 9%.

The outlook is stable, reflects that pro forma for the transaction, good operating performance will continue; however, the agency said spot-market prices could moderate in 2022.

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