S&P gives Vyve, facilities B+

S&P said it assigned Mega Broadband Investments Intermediate I LLC (Vyve Broadband) and its planned $725 million of senior secured credit facilities B+ ratings. The facilities will consist of a $75 million revolver due 2025 and a $650 million term loan due 2027. The recovery rating on the facilities is 3, indicating an expectation of 50%-70% recovery (rounded estimate: 55%) in the event of a default.

Vyve will use the facilities and $8 million in balance sheet cash to refinance $535 million in indebtedness, fund a $102 million dividend and pay $21 million of fees, resulting in pro forma debt to EBITDA of about 6x.

The outlook is stable. “The stable outlook reflects S&P Global Ratings' expectation that strong growth from broadband will enable deleveraging potential of more than 0.5x per year, but rating upside is limited over the next year by relatively low penetration rates, required network investments that will limit free operating cash flow, and an aggressive financial policy,” S&P said in a press release.

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