S&P rates Primo Water notes B

S&P said it assigned B issue-level and 4 recovery ratings to Primo Water Holdings Inc.'s planned $750 million of senior unsecured notes. The 4 recovery rating indicates an expectation for modest (30%-50%; rounded estimate: 40%) recovery in default. Primo Water Holdings is a wholly owned subsidiary of Primo Water Corp., rated B.

Together with cash on hand and borrowings under the revolver, the proceeds will be used to refinance Primo Water Corp.'s $750 million of senior unsecured notes due 2025.

“We view the proposed transaction as leverage neutral and debt to EBITDA, on an S&P Global Ratings' adjusted basis, pro forma the transaction will remain about 5x based on year-end 2020 EBITDA,” S&P said in a press release.

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