S&P gives B- to IntraFi loan

S&P said it assigned B- issue-level and 3 recovery ratings to Nexus Buyer LLC's (IntraFi) new $500 million first-lien term loan due 2028. The 3 recovery rating indicates meaningful (50%-70%; rounded estimate: 60%) recovery in default.

“The proposed transaction does not affect our B- issuer credit rating or positive outlook on IntraFi. The positive outlook reflects that we could upgrade the company in the next 12 months if we believe its financial policy will enable it to sustain S&P Global Ratings-adjusted leverage below 7.5x and free operating cash flow (FOCF) to debt of more than 5%. Pro forma for the transaction, we expect IntraFi's S&P Global Ratings-adjusted leverage will be in the low-5x area in 2023.

“While this is below our 7.5x upgrade threshold, the rating incorporates our expectation that the company will continue to periodically increase its leverage to fund shareholder returns,” S&P said in a press release.

The company plans to use the proceeds to fund a $447 million shareholder distribution, repay its $33 million revolver balance and pay transaction fees and expenses.

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